AU Deserves Better

AU gives documents to Senate

2005-12-03T01:09:00.000-05:00

The Senate Finance Committee just got a whole ton of info from us on Dec. 1 -- along with a 13 page letter "explaining" the decisions made along the way... the letter is available in PDF form from the AU Governance website.

Also, the Post has an article today (Saturday) briefly updating the situation. Probe turns focus to AU's Trustees:

The chairman of the Senate Finance Committee said yesterday that its investigation of American University will now focus on the current board of trustees.

After getting several requested boxes of documents from the private university, a 12-page letter from the chairman and vice chairman of the board explaining the decisions surrounding the ouster of president Benjamin Ladner, and hearing from students, faculty and alumni, Sen. Charles E. Grassley (R-Iowa) made clear that the congressional inquiry is not over.

"The best way to avoid problems like Benjamin Ladner's excessive compensation and severance is for boards to know that the buck stops with them," Grassley said in a statement yesterday.Ladner's presidency ended in October after an audit questioned hundreds of thousands of dollars of spending by Ladner and his wife for travel and personal expenses over the past three years. He agreed to sever ties with the school in exchange for a $3.75 million severance package -- a deal that angered many on campus, who had asked that he be fired without a "golden parachute."

Along the way, five of the 25 trustees quit. The U.S. attorney's office has been looking into the matter. And a congressional committee reviewing nonprofit institutions -- which must avoid excessive compensation because of their tax-exempt status -- has jumped in, too.

In their most detailed public explanation to date, trustees Chairman Gary M. Abramson and Vice Chairman Thomas A. Gottschalk sent a letter -- made public yesterday -- to Grassley and Sen. Max Baucus (D-Montana) describing the events of the past months, defending some of the board's actions and saying others are being corrected.

Gottschalk and Abramson explained why the board had been impressed with Ladner's presidency, and wrote, "Perhaps, because of the university's success under his leadership and concern that Dr. Ladner might be recruited to another university, the board failed to follow sufficiently rigorous procedures for reviewing and approving the president's employment contract and compensation, as well as effectively auditing expenses."

They wrote about a contract signed in 1997 by Ladner and then-Chairman William I. Jacobs that had no end date and ambiguous terms that allowed Ladner to be reimbursed for expenses over and above what was allowed for other university employees. The full board -- including Gottschalk and Abramson -- did not know about that contract until this year, they said.

Ladner has defended his spending as consistent with the terms of that contract.

Based on the advice of consultants that Ladner's total compensation could be considered excessive, the board decided this year to reduce it from $886,750 to no more than $793,000.

And they explained the reasoning that went into his severance package: They worried about a potential lawsuit, particularly given the ambiguity of the 1997 contract.

This week, in a letter to the university community, four of the five former trustees proposed rescinding the severance package and removing the 13 board members who the four say opposed them when they pushed for an investigation, cuts in Ladner's pay and other changes.

They said the current board is stalling on making changes and recommended that the search for a new president begin right away.

"Now more than ever, the university needs new leadership," said the letter, which was signed by two former chairmen, Leslie E. Bains and George J. Collins, and former trustees Leonard R. Jaskol and Paul Martin Wolff.

The four said they will return to the board and start the changes if students and faculty members want them back -- and if the 13 opposing members are removed. The board is self-appointed.

Gottschalk responded: "Since these other trustees are no longer involved in the board, it's hard for them to have current information or accurate information about all of the good efforts and good motivations that are proceeding."

One of those efforts is their response to the Senate Finance Committee, Gottschalk said, adding that it ". . . certainly gets us farther along in explaining the good reasons that the board had for the actions they've taken."

Open Letter #3: The Plan

2005-11-30T18:26:00.001-05:00

An Open Letter to the American University Community

In an Eagle editorial, Chris Hunter took us to task for not outlining "a clear path for resuscitating the University." It was not our intention to leave the AU Community in the lurch but to express our complete disgust for the majority of the Board’s lack of adherence to the basic tenants of good governance. Mr. Hunter chided us for limiting our open letters to the University community to setting the record straight and correcting misstatements by members of the ad hoc committee. The article called on us to put forth our program for change.

Here it is.

1. Remove all 13 members of the ad hoc committee from the Board. It is for good reason that the faculty and the students have no confidence in them. Over the last year, they have demonstrated an unmistakable record of putting the interests of Ben Ladner above those of the University. Only members of the ad hoc committee voted to give Ladner a salary raise even though the Board's outside advisors recommended to the contrary. Only members of the ad hoc committee favored bringing Ben Ladner back as President with an $80,000 to $100,000 salary for his wife and reinstating the chef and social secretary. Only members of the ad hoc committee took the lead in overruling the severance negotiation committee and raising the dismissal package so that Ladner would have his back taxes and reimbursement obligation covered out of the University’s own funds. It was the ad hoc committee which turned the golden parachute into platinum.

Keep all other remaining Board members. Although we disagree with their voting in favor of a severance package, we do not question their loyalty to American University. We believe their decisions on severance and discharge were wrong; but we also believe that they have mostly put their fiduciary duty to the University first and foremost.

Remove the President from the Board. Develop a program for selecting Trustees that will include the input and participation of the President, the faculty, the students and the alumni.

2. The delay of formal changes in governance to May, 2006 by the current Board is a sham. This stall tactic is an attempt to have the proactive students graduate and the faculty and alumni lose interest or hope. Therefore, immediately begin open forums on the 14 point plan (a copy of which is attached) for improved governance developed by Leslie Bains and, after consultation with all constituencies, implement a final plan within 60 days. Schedule 4 Board meetings a year, with the spring meeting a "retreat" involving students and faculty. While the Bains plan is discussed, take immediate action to make all Committee and Board meetings more open and their actions more public.

3. Once the Board governance plan has been approved, begin discussions with all concerned groups on improving the governance of the University at all levels. The faculty, student and alumni organizations should have rules of governance that mesh with and complement those of the Board. There should be an interwoven fabric of governance that brings together cohesively all interest groups.

4. As under George Collins and Leslie Bains, insure that the Compensation Committee has members and most specifically a Chairman who are well versed in compensation issues. Continue having the Committee use outside advisors. We were quite pleased with the work of Arnold&Porter and Mercer&Associates and would urge their continued retention. As the search for a new President goes on, the Compensation Committee should be involved in setting the parameters of any compensation proposals. The Committee should also undertake a long overdue review of the salaries of all senior administrators to assure the Board that the salaries are fair, reasonable and consistent with the University's salaries for the faculty and staff. The University has limited resources and thus must assure itself that it has properly set compensation at all levels.

5. Likewise, the Board needs a strong Audit Committee, similar to that which conducted the investigation of the Ladners’ spending and underreporting of imputed income. It should be chaired by a member with audit and accounting experience who has no strong personal or emotional ties to the President. The President’s expenses should be reviewed annually. The Committee should also be allowed to hire, as needed, outside advisors. It should immediately begin a thorough analysis of University procedures so as to assure the Board that improper expenses will no longer slip through the cracks or, even worse, be countenanced. Over the past six months, several anonymous letters have been received outlining alleged abuses in procurement, hiring of contractors, etc.

6. Begin immediately the search for a new President. Now more than ever, the University needs new leadership. As various deans have repeatedly commented, an ethical cloud hangs over the University. The selection of a new President will go far to remove this impediment. The Search Committee should be composed of Board members, faculty, deans, students, alumni, and staff. We would also add to the Search Committee, as advisors, outsiders who can give a unique and varied perspective. The new President should work with the Board to ensure that they do annual reviews and evaluations of the key members of the Administration.

7. Co-operate fully with the Grassley investigation.

8. Disavow and recover the severance package paid to Ladner. Make it a matter of University record that the 1997 contract written and signed by Ladner and former chairman Bill Jacobs is invalid and that the University had ample reason to discharge Ladner for cause. If this means litigation, do not shy from it, but embrace it. Litigation may not be the easy way, but, if required, the right way. We have a principle to uphold which quite simply is that American University does not reward improper behavior. We must make it clear that there is a cost to breaching one's loyalty to the University.

9. We are prepared to return to the Board and work to make this program successful, but only if there is substantial agreement among the faculty and students that we should serve and only if the 13 members of the ad hoc committee are removed..

This program is only a beginning. It is neither definitive nor final. But it is plan that can have immediate positive results. We welcome comments.

Sincerely,

Leslie E. Bains, Former Chair of the Board of Trustees

George J. Collins, Former Chair of the Board of Trustees

Leonard R. Jaskol, Former Chair of the Audit Committee

Paul Martin Wolff, Former Trustee
An Open Letter to the American University Community
September 30, 2005

Since assuming the Chair of the Board of Trustees in May, I have spent much time with all the Trustees discussing changes in how the Trustees operate and in a reform agenda for the campus.

I propose this to the community as a proud 1965 American University graduate who wants to see our great University continue to grow into one of the leading higher institutions of learning in the country, and be a campus that is leading a reform movement not just here, but setting new standards across the country.

Having participated in an extraordinary, indeed historic, set of meetings on Wednesday with leaders from the American University community, I am more convinced than ever that the University is capable of playing this leadership role.

I am proposing a 14-point reform agenda and I encourage members of the AU community to let me know their thoughts as the Board considers these changes. My plan is:

1) We will encourage and institutionalize more Board interaction with the community. I will host a series of town meetings on campus during the academic year inviting other Trustees and the University President to join those meetings. The aim is to encourage a free flow of ideas and debate over the direction AU should take.

2) I will propose to the Board of Trustees that we should add one student to the Board.

3) I will propose to the Board of Trustees that we should add one faculty member to the Board.

4) I will propose to the Board that we increase from three to four Board meetings a year.

5) I will set up a Committee to rapidly update the Board Bylaws and make them more consistent with 21st Century practices.

6) I will propose that the Board adopt a Bylaw that revokes Board membership from any Trustee who misses more than two meetings in a year without an excused absence. Except for the faculty and student members, each Trustee should be a contributor to the University relative to their own means.

7) I will propose reinforcing the University’s existing spending controls, annual audits of senior Officers of the University, with clear guidelines for spending and travel costs, especially in the office of the President. The Audit Committee Chairman has already put in place new financial controls. We need to do even more.

8) We will continue to formally evaluate the President’s salary and benefits in line with the appropriate comparisons and institute a more rigorous annual performance review.

9) There will continue to be zero tolerance at all levels of the University for financial or ethical lapses.

10) I propose that the Board of Trustees consciously focus on the need for greater diversity on the Board to reflect the diversity on campus and our values.

11) I have already established breakfasts and a luncheon with the Deans, appropriate members of the faculty and our student leaders for the November Board meeting. This will become a regular practice.

12) The President will not be a member of the Board of Trustees but will come to our meetings as appropriate.

13) We will reinforce the whistleblower policy at the University.

14) We will assure that Code of Conduct and Conflict of Interest statements are signed by all Trustees and appropriate members of management annually.

At the November Board meeting, I will encourage our Trustees to adopt these changes as soon as possible.

This is a truly outstanding university. We attract top faculty, students who become leaders of our country and in the various professions, staff that proudly does its work every day. We have a loyal group of alumni and donors without whom this university could not exist.

The time has come – and is long overdue – for more and better communication on this campus.

I welcome any and all suggestions from anyone associated with this university.

I look forward to working with the Board of Trustees and the American University community to advance the institution’s important mission.

Sincerely,

Leslie E. Bains
Chair, Board of Trustees
American University

Open Letter #3: The Plan

2005-11-30T18:26:00.000-05:00

An Open Letter to the American University Community

In an Eagle editorial, Chris Hunter took us to task for not outlining "a clear path for resuscitating the University." It was not our intention to leave the AU Community in the lurch but to express our complete disgust for the majority of the Board’s lack of adherence to the basic tenants of good governance. Mr. Hunter chided us for limiting our open letters to the University community to setting the record straight and correcting misstatements by members of the ad hoc committee. The article called on us to put forth our program for change.

Here it is.

1. Remove all 13 members of the ad hoc committee from the Board. It is for good reason that the faculty and the students have no confidence in them. Over the last year, they have demonstrated an unmistakable record of putting the interests of Ben Ladner above those of the University. Only members of the ad hoc committee voted to give Ladner a salary raise even though the Board's outside advisors recommended to the contrary. Only members of the ad hoc committee favored bringing Ben Ladner back as President with an $80,000 to $100,000 salary for his wife and reinstating the chef and social secretary. Only members of the ad hoc committee took the lead in overruling the severance negotiation committee and raising the dismissal package so that Ladner would have his back taxes and reimbursement obligation covered out of the University’s own funds. It was the ad hoc committee which turned the golden parachute into platinum.

Keep all other remaining Board members. Although we disagree with their voting in favor of a severance package, we do not question their loyalty to American University. We believe their decisions on severance and discharge were wrong; but we also believe that they have mostly put their fiduciary duty to the University first and foremost.

Remove the President from the Board. Develop a program for selecting Trustees that will include the input and participation of the President, the faculty, the students and the alumni.

2. The delay of formal changes in governance to May, 2006 by the current Board is a sham. This stall tactic is an attempt to have the proactive students graduate and the faculty and alumni lose interest or hope. Therefore, immediately begin open forums on the 14 point plan (a copy of which is attached) for improved governance developed by Leslie Bains and, after consultation with all constituencies, implement a final plan within 60 days. Schedule 4 Board meetings a year, with the spring meeting a "retreat" involving students and faculty. While the Bains plan is discussed, take immediate action to make all Committee and Board meetings more open and their actions more public.

3. Once the Board governance plan has been approved, begin discussions with all concerned groups on improving the governance of the University at all levels. The faculty, student and alumni organizations should have rules of governance that mesh with and complement those of the Board. There should be an interwoven fabric of governance that brings together cohesively all interest groups.

4. As under George Collins and Leslie Bains, insure that the Compensation Committee has members and most specifically a Chairman who are well versed in compensation issues. Continue having the Committee use outside advisors. We were quite pleased with the work of Arnold&Porter and Mercer&Associates and would urge their continued retention. As the search for a new President goes on, the Compensation Committee should be involved in setting the parameters of any compensation proposals. The Committee should also undertake a long overdue review of the salaries of all senior administrators to assure the Board that the salaries are fair, reasonable and consistent with the University's salaries for the faculty and staff. The University has limited resources and thus must assure itself that it has properly set compensation at all levels.

5. Likewise, the Board needs a strong Audit Committee, similar to that which conducted the investigation of the Ladners’ spending and underreporting of imputed income. It should be chaired by a member with audit and accounting experience who has no strong personal or emotional ties to the President. The President’s expenses should be reviewed annually. The Committee should also be allowed to hire, as needed, outside advisors. It should immediately begin a thorough analysis of University procedures so as to assure the Board that improper expenses will no longer slip through the cracks or, even worse, be countenanced. Over the past six months, several anonymous letters have been received outlining alleged abuses in procurement, hiring of contractors, etc.

6. Begin immediately the search for a new President. Now more than ever, the University needs new leadership. As various deans have repeatedly commented, an ethical cloud hangs over the University. The selection of a new President will go far to remove this impediment. The Search Committee should be composed of Board members, faculty, deans, students, alumni, and staff. We would also add to the Search Committee, as advisors, outsiders who can give a unique and varied perspective. The new President should work with the Board to ensure that they do annual reviews and evaluations of the key members of the Administration.

7. Co-operate fully with the Grassley investigation.

8. Disavow and recover the severance package paid to Ladner. Make it a matter of University record that the 1997 contract written and signed by Ladner and former chairman Bill Jacobs is invalid and that the University had ample reason to discharge Ladner for cause. If this means litigation, do not shy from it, but embrace it. Litigation may not be the easy way, but, if required, the right way. We have a principle to uphold which quite simply is that American University does not reward improper behavior. We must make it clear that there is a cost to breaching one's loyalty to the University.

9. We are prepared to return to the Board and work to make this program successful, but only if there is substantial agreement among the faculty and students that we should serve and only if the 13 members of the ad hoc committee are removed..

This program is only a beginning. It is neither definitive nor final. But it is plan that can have immediate positive results. We welcome comments.

Sincerely,

Leslie E. Bains, Former Chair of the Board of Trustees

George J. Collins, Former Chair of the Board of Trustees

Leonard R. Jaskol, Former Chair of the Audit Committee

Paul Martin Wolff, Former Trustee

Back from Break

2005-11-28T00:37:00.000-05:00

I apologize for the lack of posts... I hope that everyone had a great Thanksgiving (and for you AU community members, that you took some time off and enjoyed break).

I'll have some things to post soon. In the meantime, I have to get to bed because I have class at 8:30.

Board "report"

2005-11-17T01:34:00.000-05:00

Up at the AU governance website. I'll let you all draw your own conclusions.

American University Board of Trustees
Report of the Fall 2005 Meeting
November 10-11, 2005

Opening Statement

In the spirit of good governance and openness, the Board of Trustees leadership is working with the AU administration to make available information on the trustees meetings that took place on campus November 10 and 11. Presuming this information will be helpful and well received, we intend to continue to do this into the future. These meeting summaries and other trustee information will be posted at the new governance Web site, as well as on the president’s own Web page.

Committee Activities

Much of the research and general business of the Board of Trustees take place in the work of the board’s standing and ad hoc committees. Campus representatives participate in the general sessions of some of the committees’ meetings, including meetings of the Academic Affairs, Campus Life, Finance and Investment, and Campaign Steering and Development Committees. At the regular board meetings, the chairs of the various committees report out to the full board and may include recommendations for the board to approve various resolutions and policies affecting the operations of the university. On Thursday, November 10, 2005, several standing committees met:

Audit Committee – Chaired by trustee and AU alumnus Charlie Lydecker, the committee reviewed the report of the university’s external auditor, KPMG, on the university’s financial statements for academic years 2003-2004 and 2004-2005 and discussed ongoing validation and testing of internal financial and management controls. In addition, the committee decided that the president’s expenses and those of other executives will be regularly reviewed.

Trusteeship Committee – Chaired by trustee and vice chair Tom Gottschalk, the committee discussed the composition and leadership for the next two-year term (2005-2007) of the board’s standing and ad hoc committees. Of particular note was the committee’s goal of having a more diversified board and discussion of trustees’ responsibilities.

Finance and Investment Committee – Chaired by trustee and AU alumnus Gary Cohn, managing director and co-head of the Equities Division of Goldman Sachs & Co., the committee considered the mid-year report on budget and capital refinancing.

Academic Affairs Committee – Chaired by Bishop John Schol, the committee discussed the acting provost’s report in general session and heard from the student representatives to the board from the Student Government and Graduate Leadership Council about their opposition to the proposed change to the Faculty Manual regarding voting members of the schools’ and colleges’ rank and tenure committees.

Campus Life Committee – Chaired by trustee and AU alumna Pamela Deese, the committee focused mainly on the annual presentation of a set of campus “metrics,” which were prepared by vice president of campus life Gail Hanson and her staff and by Karen Froslid-Jones, director of the university’s Office of Institutional Research and Assessment. As part of the discussion on the presentation, the committee reviewed the 2004 Freshman Census, 2005 Graduation Census, and 2005 Campus Climate Survey.

Campaign Steering Committee – Board chairman Gary Abramson led the discussion. Vice president of university relations Al Checcio updated the committee on the progress of AnewAU, the university’s capital campaign. Since the campaign was announced in 2003, AU has received to date approximately $109 million in gifts and pledges toward a total goal of $200 million. In addition, the number of alumni participating in the campaign has increased 14 percent over the same time last year. The committee discussed the resignation of Mr. Checcio, effective January 1, and the organization and management of the office following his departure.

Full Board Meeting

On Friday, November 11, 2005, the board held its regular fall meeting in the Board Room on the sixth floor of Butler Pavilion. Eighteen (17 in person and 1 person by phone) of the board’s 20 trustees and representatives from all six of the campus constituencies (undergraduate, graduate and law students, and faculty, staff and alumni) participated in the general session.

Report of the Chair – New board chairman Gary M. Abramson welcomed the other trustees, the interim president Neil Kerwin, the university’s vice presidents, and the six campus representatives (Professor Tony Ahrens, chair of the Faculty Senate; Kyle Taylor, president, Student Government; Peter Brusoe, executive director, Graduate Leadership Council; Adam Cohen, president, Student Bar Association; Robin Beads, president of the Staff Council; and Margot Herron, representative of the Alumni Association). In his opening remarks, Mr. Abramson thanked the AU community for its loyalty, its concern for the university’s progress, and its offers to assist the board in its efforts to return the university to stability and further growth.

Report of the Trusteeship Committee –Following the board’s discussion of Thursday’s Trusteeship Committee meeting, the full board approved new committee memberships and leaders for 2005-2007. Committee chair Thomas Gottschalk noted that the Trusteeship Committee will work in conjunction with the board’s Governance Committee (see below) to make recommendations for committee charters and defining board committee roles and functions and will present them to the full board at its winter 2006 meeting.

Committee chairs for the 2005-2007 term are as follows: Academic Affairs – Bishop John Schol; Athletics – Jack Cassell; Audit – Charles Lydecker; Campaign Steering and Development – Gary Abramson and Gary Cohn, co-chairs; Campus Life – Pamela Deese; Compensation – Gary Abramson; Finance and Investment – Gary Cohn; International Affairs – Jeffrey Sine; and Trusteeship – Thomas Gottschalk.

Report of the Special Committee on Governance – Chaired by trustee and AU alumna Pamela Deese, the board’s Special Committee on Governance updated the full board on its activities since being appointed in late October. The committee –whose other members are AU alumnus and board chairman Gary Abramson, AU alumna Regina Muehlhauser, Bishop John Schol of the Baltimore-Washington Conference of the United Methodist Church, and AU alumnus Jeffrey Sine – has requested consultancy proposals from the American Council on Trustees and Alumni’s (ACTA’s) Institute for Effective Governance, the Association of Governing Boards of Universities and Colleges (AGB), and the National Association of Corporate Directors (NACD) to consult with the committee to fulfill its charter.

The committee’s charter is “to evaluate board governance and make recommendations to the full board for improvements in such governance to enable the board to more fully and effectively meet its fiduciary responsibilities to the university.” The board directed the committee to consult with university constituencies, other universities, and appropriate consultants to inform its perspective and to otherwise contribute to its work and eventual recommendations.

In addition to describing the committee’s work with consultant organizations, Trustee Deese informed the board of the committee’s timeline for its activities:

Mid-November to mid-December 2005 – determine which consultant(s) to retain.
January to mid-February 2006 – conduct a formal self-assessment of the board under the direction of the consultant(s).
Mid-February 2006 board meeting – make its preliminary report to the board.
End of February through March 2006 – conduct extensive and inclusive consultations with the university community, including the university-wide Working Group on Governance, the Faculty Senate’s ad hoc Committee on Governance, the ad hoc University-wide Student Task Force on Reformation of University Governance, and whichever consultant is selected.
May 19, 2006 board meeting – make final recommendations to the board.

Report of the Special Committee on the Presidential Search Process –Chaired by AU alumnus Matthew Pittinsky, the board’s Special Committee on the Presidential Search Process is composed of AU alumnus Jack Cassell, The Rev. Jerome King Del Pino, the general secretary of the General Board of Higher Education and Ministry of the United Methodist Church, and AU alumna Robyn Mathias. The committee’s charter from the board directs it: “to involve American University students, faculty, donors, alumni, and other trustees in establishing a process for identifying a new university president, and to recommend to the Board of Trustees such an inclusive and informed search process as to ensure the best possible leadership for the future of the university.” At the November 11 meeting, Mr. Pittinsky made the committee’s first report to the b oard, following several meetings the previous week with the university’s deans and representatives from the university’s Faculty Senate, student leadership, and Staff Council. Based on the committee’s report, the board decided to schedule the kick-off of an inclusive presidential search process no earlier than June 2006, after the end of the academic year, so that the board can focus on governance changes that will help it attract the best possible candidate and ensure that important lessons from recent events have been learned. In the meantime, no solicitation or appointment of a candidate will be made outside of a committee-based search process.

Report of the Standing Committees –In addition to the board meeting’s general session, the campus representatives also participated in several of the standing committee meeting general sessions. The committee chairs reported to the board on each committee’s general session. Bishop John Schol, the chair of the Academic Affairs Committee, reported on the committee’s discussion of Interim Provost Ivy Broder’s report and asked her to highlight for the full board some of the university’s academic achievements since the May board meeting. Following that report, the committee asked student representatives to speak about their opposition to the Faculty Senate’s proposal to amend the Faculty Manual and end voting membership positions for students on the schools’ and colleges’ rank and tenure committees.

As was reported in the summary of the Campus Life Committee’s Thursday meeting, the chair, Pam Deese, asked vice president of campus life Gail Hanson and director of institutional research and assessment Karen Froslid-Jones to summarize their findings from the “campus metrics,” the results of the 2004 Freshman Survey, the 2005 Graduation Survey, and the 2005 Campus Climate Survey.

Mr. Abramson, the chair of the Campaign Steering and Development Committee, reported on the Thursday committee meeting and presented some of the highlights of its discussion. The “Campaign for AnewAU” will continue as a university priority. As part of the committee’s review of the capital campaign’s performance, Mr. Abramson spoke about the successful leadership and recent resignation of vice president of university relations Al Checcio, who will take a similar position at Fordham University. In light of Vice President Checcio’s significant contributions to the work of the Office of University Relations and the current success of the university’s capital campaign, the board approved a formal resolution of appreciation of Mr. Checcio’s achievements and wished him well in his next role.

Reports of the President, Provost, Vice Presidents, and Campus Representatives – The materials the president sends to the board to prepare for its meeting includes reports from the president, provost, vice presidents, and the six campus representatives. These reports inform the trustees about significant events and achievements since the board’s last regular meeting (May 2005) and present to the board the issues and concerns affecting the university’s offices and representative organizations. The reports also provide material for comment and discussion during the general session. Later this month, these reports will be made available on the university’s governance Web site, www.american.edu/governance .

Another item that will be accessible from the AU governance Web site is the report of the ad hoc University-wide Student Task Force on Reformation of University Governance. Among the committee’s recommendations are to:

Add three students and three faculty to the Board of Trustees as voting members;
Remove the president as an ex-officio member of the board;
Increase the number of annual regular board meetings from three to four.

Executive Session

The board met in executive session following the open meeting.

Other Board Activities

Town Meeting – On Thursday, November 10, six trustees (David Carmen, Jack Cassell, Pamela Deese, Robyn Mathias, Matthew Pittinsky, and Bishop John Schol) held a town hall meeting with close to 200 students, faculty, and staff in attendance. The meeting was co-hosted by Matt Pittinsky and Student Government president Kyle Taylor. The gathering prompted a straight-forward exchange between trustees and the campus community on the events of recent weeks. The topics discussed included the settlement agreement; the various campus petitions and “no confidence” votes; the presidential search; future governance, oversight, and changes to the board; openness, inclusion, and communication; the Senate Finance inquiry; and others.

Breakfast for Student Leaders – On Friday morning, November 11, the board hosted a breakfast for approximately 40 undergraduate, graduate, and law student leaders.

Post-Board Meeting Sessions with Students –After the formal board meeting concluded, vice chair Thomas Gottschalk met with approximately 20 students who had assembled outside of the board room to voice their concerns. Mr. Gottschalk summarized some of the board activity from the day, reviewed the recent chain of events and answered student questions. In addition, chairman Gary Abramson and Interim President Neil Kerwin met with reporters from the Eagle and the American Weekly to summarize the board meeting.

Conclusion

I hope that you find this summary to be both informative and helpful. You can provide comments and suggestions to trustee leadership at aubot@american.eduand to the AU interim president at president@american.edu.

Gary Abramson
Chairman, Board of Trustees

Hm.

2005-11-16T11:10:00.000-05:00

It's not online, so generally I would just link, but I'm going to repost it in its entirety, since you can't read it unless you grab an Examiner today! Check out the very very interesting comments from Carmen. Someone is scared...

By MIKE RUPERT
Examiner Staff Writer
Four former American University trustees who resigned amid the investigation into ex-school president Benjamin Ladner said in an open letter Tuesday that the current board is disseminating “inaccurate” and “flat-out false” information about what happened behind closed doors this summer.
The trustees — former board chairwoman Leslie Bains, George Collins, Leonard Jaskol and Paul Wolff — said assertions that the ad hoc committee of 13 pro-Ladner trustees, dubbed the “Gang of 13,” never existed are completely false and that the “gang” tried to negotiate a quick reinstatement of Ladner before the students or faculty could voice their opinions.
Current trustee David Carmen, considered the leader of the “gang,” said he feels the former trustees’ letter is “sad.”
“The writers of this letter seem intent on sowing dissent, squandering university resources and misleading the public about the matters of the last few months,” Carmen told The Examiner on Tuesday. “Each of these individuals chose to continue to pursue their personal agendas and remove themselves from the fray rather than make the tough choices needed to chart a new, positive course for American University.”
The four trustees said that early in the investigation, the larger group repeatedly attempted to “cut back” the audit process from three years to one and consistently tried to gain complete control of negotiations.
Trustee Matthew Pittinsky, who organized a town hall meeting with students last Thursday, said the group never existed.
“The idea that the board was split with factions — that their even was a group of 13 trustees who acted as a block — is false,” said Pittinsky. “I personally watched all trustees vote their conscience, change their mind over time, agree and then disagree with certain colleagues, etcetera.”
The letter states the group routinely sent e-mails under the title “ad hoc committee” and listed 13 members.
The letter also disputes statements that the report by the board’s Audit Committee was accepted “without reservations.”
“This statement is completely and absolutely reckless and bears no relationship to the truth,” the letter states. “[The] effort is marked by repeated efforts by various board members to curtail its effort and ultimately to dilute its conclusions — all in ways that only benefited Ben Ladner.”
mrupert@dcexaminer.com
-----
Turmoil continues at AU
- Four former trustees sent a second open letter to the AU community.
- The letter states current trustees are trying to bury the truth.
- Current trustee David Carmen called the Ladner drama “a reign of terror in the board room.”
- Carmen said former board chairwoman Leslie Bains refused to share audit information for months.

___________________

Now that's funny. Because they pretty much say the same thing about you, Mr. Carmen. And funnily enough, they actually have the record to BACK that statement, unlike you.

Questions?

2005-11-15T20:38:00.000-05:00

By the way guys, if anyone has questions on the letter from the 4 former trustees posted below, esp. on some of the more specific stuff, please comment and I'll do my best to answer it. I should be able to answer most of the specific questions you guys could come up with.

My personal stance on the letter? These 4... they're the ones who are looking out for us, and they're the ones telling the truth. I wouldn't trust the current board or its members further than I could throw them (and for those of you who haven't seen my pathetic, puny arm muscles, let me tell you, it's about an inch).

I bet we'll get another weak rebuttal about moving on and the wonderful future the BOT can provide all us students who pay $40K a year... don't buy it. No confidence in this BOT means we don't trust them. They have been reactive, not proactive. We have the jump on them. They think they can outlast us on this. We have to show them that is not the case!

An Open Letter (#2)

2005-11-15T16:54:00.000-05:00

An Open Letter to the American University Community

We write again to set the record straight. Both in the press and "town hall" meeting with the students, statements were made that were far from accurate and in certain instances flat-out false. It is important that you know the truth.

The Ad Hoc Committee

It was repeatedly stated that there was no group, no faction of the Board. A Trustee went so far as to call the idea of a group "a myth." The facts speak differently. The name ad hoc committee was created by its members. They sent e-mails to other Board members under this title and identified in their mailings who made up the committee. They are Gary Abramson, David Carmen, Jack Cassell, Pam Deese, Jerome Del Pino, Fuad El-Hibri, Hani Farsi, Charles Lydecker, Robyn Mathias, Regina Muehlhauser, John Petty, Bob Pincus, and Jeff Sine. At the "town hall" meeting, it was further stated that there had been no relationship with Ladner by any group of board members. To the contrary, some or all of them met with Ladner after he was suspended and negotiated his return. The terms included the reinstatement of the chef and the social secretary and, a new benefit, a salary for Nancy Ladner of $80,000 - $100,000, a level attained by only a few faculty members. They also called for a review of Ladner’s compensation within the year. Jeff Sine further negotiated a reduction in reimbursements to the University of $21,000 and not the $125,000 recommended by the Audit Committee. They agreed with Ladner not to enforce the imputed income amount set by the Audit Committee, but rather to have it negotiated between them and a third party. They attempted (luckily unsuccessfully) to call a special board meeting and pass their proposal before either the students or the faculty had an opportunity to express their views on Ladner's return.

The 2005 Salary Negotiations with Ladner

David Carmen, the leader of the ad hoc group stated he had been concerned about not paying Ladner above his peer group and that reducing Ladner's salary was the "right thing to do." This was clearly not his view at the time the salary issue was resolved. The Board's outside advisors recommended a salary at which they were willing to give the Board a "comfort letter" that the compensation was fair and reasonable. The advisors' recommendation was approved by the Board, with six dissenting votes-all of whom argued for higher compensation. The six dissenting votes all became members of the ad hoc committee, including its leader.

In addition, there were at least six Board meetings in 2004 and 2005 at which Ben Ladner’s compensation, with updates by the consultants, was discussed with the full Board. For Mr. Carmen and the ad hoc committee to claim they did not know the President’s compensation is disingenuous.

The Audit Report

Matt Pittinsky stated that the report of the Audit Committee was accepted "without reservations," "without amendment." This statement is completely and absolutely reckless and bears no relationship to the truth. The history of the Audit Committee's investigation is marked by repeated efforts by various board members to curtail and ultimately to dilute its conclusions--all in ways that only benefited Ben Ladner. The members who so acted all became part of the ad hoc committee. In early May of this year, Len Jaskol, Chairman of the Audit Committee, made a three hour presentation of the Committee's preliminary findings. The Board voted unanimously to continue the investigation. From that moment forward, there were constant attacks on the Committee and its outside advisors. The objectivity of the advisors was constantly questioned. They were accused of being "out to get Ben." John Petty tried to get the audit cut back, arguing for something he called a "standard audit." He ultimately, as a member of the Audit Committee, dissented from the report, arguing that the recommendations should be prospective only. This meant that Ladner would get a slap on the wrist, but would not have to pay the University one cent or have his tax returns amended to show additional imputed income. David Carmen in an e-mail urged Leslie Bains, as Chairman, to devote the University's energy to uncovering the whistleblower rather than the audit. At the September 12 board meeting, Bob Pincus urged that the audit go back only one year and not the three years chosen by the Audit Committee.

This opposition to the Audit Committee's work was only a prelude to the efforts made at the October 10 board meeting. After Len Jaskol made the Committee's report, amendments were made by the ad hoc committee to change the proportion of reimbursements and imputed income, an action which would have benefited Ben Ladner at the University’s expense. The amendment passed with all members of the ad hoc committee present voting in favor. Len Jaskol, George Collins and Gary Cohn refused as members of the Audit Committee to sign any altered report or audit. Only John Petty offered to sign. The Audit Committee report and an affirmation letter to KPMG (the University’s auditors) attesting to the validity of AU’s financial condition, if left unsigned by its Chairman, would have grave financial repercussions to the University. Despite this, several board members (all members of the ad hoc committee) voted to uphold the amendments. The amendment was eventually reconsidered and voted down, not as a matter of doing the right thing, but because Len Jaskol demanded they do the right thing.

The Severance Package

At the October 10 Board meeting, the ad hoc committee proposed that a group comprised entirely of their members negotiate a severance package with Ladner. This was defeated and a more objective committee was appointed. The ad hoc committee, however, had the last word. When the negotiators made their recommendation of a severance amount, it was amended upward by the ad hoc committee members. They raised the amount so that Ladner would come out "whole" and not suffer any consequences of paying taxes on his improper behavior. Bob Pincus made an amendment and the ad hoc committee approved over $500,000 be added to the package with the clear result that University is funding Ladner's reimbursement as well as paying the taxes on his imputed income. The committee also tried to negotiate (unsuccessfully) that Ben Ladner did not have to pay interest on the $125,000. After the meeting, one of the ad hoc committee members tried to increase the package even further and add $800,000 to the deal to compensate Ladner for his alleged lost professorship.

To this day, they assert that the severance package would minimize the University’s financial exposure. Just the opposite is true as litigation, if pursued by Ladner, would have cost approximately $400,000. The package totaled $3,750,000, a difference of $3,350,000. As they say, just do the math. Also to this day, they assert that the severance package would bring closure and allow the University to go forward. In fact, just the opposite has occurred. The AU community has reacted negatively, the Justice Department has begun a formal investigation, the IRS is poised to audit, and the Senate Finance Committee is probably going to use AU as the poster child for bad governance. Is this closure?

The 1997 Contract

Former Chairman Bill Jacobs and Ben Ladner secretly negotiated the 1997 contract. It was never authorized nor ratified by the Board. Jacobs never informed his successor George Collins of its existence. Until early 2005, no one on the Board knew of its existence with the possible exception of John Petty, then Chair of the Audit Committee, with whom Ben Ladner says he discussed certain of its terms. Petty had a duty to inform the Board of the existence of the contract, as did Ben Ladner, Bill Jacobs, and Mary Kennard as Secretary. On numerous occasions, Paul Wolff and others asked John Petty, as then Chairman of the Audit Committee, what the costs were of maintaining the presidency above and beyond Ladner's salary. The Board was repeatedly told that the imputed income amounts were quite small, always only a few thousand dollars. Petty never told the Board until 2005 that there had been no audit and that the numbers came from Ladner.

The Audit Committee gave Ladner the benefit of any doubt and determined his tax and reimbursement obligations as if the '97 contract were valid. To determine, however, what, if any, obligation the University had to Ladner if he were discharged, the issue of the contract's validity had to be confronted. Two law firms and University counsel opined that the contract was invalid. There was and is no opinion to the contrary. Yet seven members of the ad hoc committee voted to uphold the contract.

Resignations

In a recent DC Examiner article it was stated, “Trustees said they feel no pressure to resign”. Given the votes of no confidence by the students, Faculty, Deans, staff and other stakeholders of the University, how could they not feel pressure to resign? This insensitivity does not bode well for American University. If they are the agents of change, as they claim to be, the various constituencies ought to be extremely concerned.

We hope this information will be of assistance to you in assessing the current Board's statement to always put American University first.

Sincerely,

Leslie E. Bains, Former Chair of the Board of Trustees

George J. Collins, Former Chair of the Board of Trustees

Leonard R. Jaskol, Former Chair of the Audit Committee

Paul Martin Wolff, Former Trustee

News Round-up

2005-11-14T12:52:00.000-05:00

I apologize for not posting over the weekend. I have my thesis proposal due this week, so I was trying to make sure I was all set for that.

In the meantime, the Chronicle just released its annual numbers for executive compensation, and some of the numbers are pretty massive. Of course, Ladner's name comes up both times as an example of how things can go horribly wrong.

From the Chronicle of Higher Education:
Main index of articles on compensation (picture of Ladner on the main page... what a suprise).
The Federal Lens Focuses on College Chiefs' Pay
A possible cause of such episodes, he says, is that many college presidents spend a lot of time with wealthy board members and donors — American University's board, for example, has included several senior executives of Fortune 500 companies — and can forget that a president who adopts the lifestyle of a corporate executive is unlikely to be accepted by faculty members, students, or the news media.

"In moving in these glitzy circles, you begin to believe that you're part of that scene," Mr. Ingram says. "It becomes, psychologically, a sense of entitlement." Even so, he adds, cases of lavish presidential expenses are rare.

For a summary, the New York times picked up the story:
New York Times: College Leaders' Earnings Top $1 Million

It's also Monday, which means The Eagle!

Students Express Frustration in Town Hall Meeting with Board Members
Monica Price, a graduate student in the School of International Service and a member of the activist group Students for a New AU, read a statement in which she blasted the board. "It is your actions and inactions that have brought us here," she said. "You were in the driver's seat, not us."

SG Senate supports ex-board members' frustrations
The Undergraduate Senate passed a resolution yesterday supporting the four former members of the board of trustees who have resigned in recent months, in addition to a bill calling on the board to amend its bylaws in accordance with the recommendations by the Ad-Hoc University-Wide Committee on Reformation of University Governance.

Staff Editorial: Board of Trustees: close, but no cigar
The board met last Thursday in an open forum with students and faculty. The aim was to make the transition process more transparent, but it was apparent that wounds still run deep over the departure of former president Benjamin Ladner.

Board of Trustees Strives for Transparency
The topic of a student serving on the board was mentioned several times during the meeting, Abramson said. "We have heard loud and clear about student member or members on the board" said Abramson, adding that board members are "keeping an open mind on this and no one has made a clear decision either way yet."

Apparently, we flay trustees.

2005-11-11T23:33:00.000-05:00

OK, this could be the thing that makes my night. Check it out, we flay them! I just wanted to post an image of it tonight, in case the front page of the Post online changes by tomorrow.

That is awesome.

A long day

2005-11-11T23:10:00.000-05:00

Hi all. It's been a long day on my part... up at 6:30 to have breakfast with the trustees and I just finished a paper that was due at 11:59. In fact, I am early! As for last night, as for this morning, then at the teach-in, and at the protest this afternoon, I have a lot of things to comment on. HOWEVER, I will not be doing that immediately. I think I need a good night's rest and some time to sit and think on what my overall impressions were beyond: "These people really are quite clueless, and they can't realize that" -- well, it's going to have to wait until tomorrow. I'm also working on a transcipt of the town hall for those of you who couldn't make it, and I have plenty of notes from the teach-in, as well as thoughts and responses to the conversations I had with trustees throughout the day (Bishop Schol, David Carmen, Jack Cassell, Tom Gottschalk, and a few brief things with others).

So, in the meantime, here's the Washington Post article about everything in the past 36 hours or so:

Angry AU Students Lash Out at Trustees

Vice Chairman Meets With Protesters

By Susan Kinzie

Washington Post Staff Writer
Saturday, November 12, 2005; Page B01

Students banged on doors, clapped and shouted, "Whose money? Our money!" as American University trustees met privately yesterday to discuss the future of the school.

The day after a contentious open forum with trustees, some students were so angry they tried to barge into the board meeting, part of an escalating campaign to demand resignations and a takeover by a control board.

They couldn't get past a cluster of administrators and campus police blocking both doors to the board room, where the trustees who agreed to give ousted president Benjamin Ladner a $3.75 million severance package were meeting to talk about board reforms, the upcoming presidential search and the need to be more inclusive of the campus community.

But after the other trustees slipped out, Vice Chairman Thomas A. Gottschalk let the protesters come in, have a seat at the table and tell him why they don't trust the board.

It's become a familiar message. Ladner lost the presidency last month after an investigation questioned hundreds of thousands of dollars in personal and travel expenses for him and his wife over the past three years. The severance package cut his ties to the private university in Northwest Washington but hardly ended the debate on campus: Deans, student and faculty groups condemned the deal and said they had lost confidence in the board.

Some petitioned Congress, some are demanding resignations, some are considering lawsuits. The Senate Finance Committee has demanded documents and asked that the three-year audit be expanded to the entire 11 years of Ladner's tenure.

Gottschalk told students that the trustees had agreed not to hurry into a presidential search until they had resolved their own governance issues. He also said they took very seriously demands for transparency and accountability and were working on ways to improve.

"We've got to open the doors," he said.

On Thursday night, the campus had an unusual -- perhaps unprecedented -- exchange between six trustees and hundreds of angry students, professors and alumni. At times like a strange and public therapy session, the two-hour forum let the campus vent to board members and let trustees see the depth of emotion at AU.

A student talking about the decision to cut the tennis teams almost started to cry, his voice shaking as he asked how the school could pay so much money to a disgraced president but not afford a small program that meant so much. A law school alumnus shouted that he hoped they all got sued. Students scoffed at some answers or laughed bitterly.

Trustees were emotional, too; the forum began with introductions and the reasons they volunteer their time to American. Matthew S. Pittinsky said he met his wife, his business partner, and the mentor who signed his marriage certificate at AU; Jack C. Cassell said he's "been running around campus 50 years," with a father who was an administrator there and died in one of the university's halls.

And trustee David M. Carmen described an agonizing summer and fall during which all sorts of things they thought they knew about the university, about a president they admired and about colleagues on the board suddenly were called into question. They didn't know who knew what, how much Ladner was actually paid or how the investigation was going, he said.

"This was the first time the board realized that all the ground we were standing on was clay," he said.

Carmen said American could move forward and become a national model for good governance; as the climate changes for nonprofit organizations, he said, AU could lead the way.

Again and again, those in the room told the trustees they don't trust them to make those changes. In the first question, graduate student Monica Price listed all the groups that had protested the board's decisions and asked, to cheers and sustained applause: "What is your planned action in response to these no-confidence resolutions?"

Trustee John R. Schol, bishop of the Baltimore-Washington Conference of the United Methodist Church, said he invites the campus community to hold the board accountable for what happens in the future.

Pamela M. Deese said the trustees already had begun talking about reforming the board. "Today we had our first governance committee meeting . . . and we set a timeline," and will ensure that it's an inclusive process, she said.

But that shocked some students, who said they had been told they could be a part of those meetings -- and had no idea the process had started without them.

Some thanked the trustees for coming and said the session was helpful.

"You got a sense that they're really committed to the university," said Prof. John M. Richardson Jr. "I don't think they changed their point of view much, but they certainly heard things -- and were aware of feelings on campus -- in a way that would have been unimaginable six weeks ago."

But many of the students left madder than they came.

"They spent more time blaming other people for the bad things they've done than fixing them," law student Ryan Butler said.

"We're tired of the spin," said Matt Barkan.

----------

Sleep well, and I hope everyone has a good weekend, but you'll see at least a post or 3 or 4 or 5 from me over the weekend!

--Meg

Town Hall

2005-11-11T00:03:00.000-05:00

I think the town hall went well, message wise. I think the audience was strong, and the Board could not walk away from that feeling too great about themselves.

I will post more tomorrow, but I get to go have breakfast with these people tomorrow at 8 am. If they thought I was grumpy tonight, wait until they see me without coffee and before a sane time. I will be inviting them to the teach-in as well as well as asking some questions that we didn't get answered tonight.

Have a message? I'll try to print it out tomorrow morning before I leave. email it to defendau at gmail.com - but make sure you leave your name, and connection to the school, otherwise I can't give it to them.

Good night all!

News, news, news

2005-11-10T12:36:00.000-05:00

REMEMBER - WARD 1, 8 PM TONIGHT!

Next.

I will not be posting a list of questions here before the meeting. Element of surprise and all. But let's just say we'll have another way for those attending to have some suggested questions if they need help.

Next!

Two news articles. One from today's Post, one from yesterday's Examiner. Both quite interesting (and both great advertising).

The Post: AU's Board Looks to Era after Ladner
"The bottom line is that this board has been deemed not competent by the faculty and the students," said Kyle Taylor, president of the Student Government Association. "We don't have faith the trustees can restructure with better governance, and we don't think they have the competence to pick a new president."

The DC Examiner: AU Trustees to Hold Open Forum on Campus
Copying most of it, because it really really provides some insight.

Trustee Matthew Pittinsky, who set up the meeting and will moderate with AU student government President Kyle Taylor, said the meeting has no agenda.

"We don't have any agenda except theirs," Pittinsky said in an e-mail. "Some may describe it as a 'free-for-all' but I prefer to think of it as an open discussion."

Several trustees said they want to move beyond the "Gang of 13" moniker - referring to the unofficial bloc of votes that were considered pro-Ladner - and start moving forward.

Pittinsky, who was not considered part of the bloc, and trustee Pamela Deese, who was, said the "gang" never existed and trustees want to move past the "pettiness."

Trustee David Carmen said the board, which he says has been "handcuffed" for months during the investigation, is excited about being able to speak openly to students and help the school move forward.

FORUM ON LADNER

- An estimated 300 students and faculty are expected to attend the 8 p.m. forum.

- Trustees say they've been "handcuffed" in the process of firing Ladner and are glad to be able to speak with campus community.

- Trustees said they feel no pressure to resign.

!!!!!

You know what to do, guys.

Town Hall Room Change

2005-11-09T10:36:00.000-05:00

They bumped us up to Ward 1. Which means a seating capacity of 300. They are also listing Gary Abramson as attending, so we're going to run with it.

300 of you all better fill that room. Just saying.

Town Hall Meeting
With Gary Abramson, David Carmen, Pam Deese, Robyn Matthias, and Matt Pittinsky.
THURSDAY, NOV 10, 8 PM, WARD 1!

See you there...

Talking points

2005-11-08T20:38:00.000-05:00

Tomorrow I will post a list of specific questions, but in the meantime, here's a copy of the talking points that are being sent out to students by both the Student Government and Students for a New AU:

Talking Points with the Board of Trustees:
1. Dr. Ladner’s compensation shows this board cannot be trusted. Rescind that decision immediately. This is OUR money.
2. Appoint a University-wide committee to review board members and governance policies.
3. Put voting student and faculty representation on the board immediately.

So there are the two starting points tonight. Feel free to post the questions you want to ask the Board as comments here, and I will add them to the master list when I post it tomorrow!

Town Hall meeting

2005-11-08T20:17:00.000-05:00

So the 4 trustees we know are coming to the Town Hall Meeting are David Carmen, Pamela Deese, Robyn Matthias, and Matt Pittinsky. Here's a quick rundown so you can start thinking up questions to ask for Thursday! And just a warning, Carmen and Deese are sharp. They are quick with their words. We must be ready for this!

David Carmen

Ringleader of the Gang of 13.
Has voted against the Audit of Ladner, against firing him for cause, voted to uphold the '97 contract, and for the severance package.
Has a lobbying firm in DC. Earlier comments to this blog show some of the ...interesting choices his firm has made.

Pamela Deese

Chair of the Governance subcommittee.
Member of the Gang of 13.
Voted against the audit, against firing him for cause, voted to uphold the '97 contract, and for the severance package.
So far, has not made any attempt at reaching out to campus constituencies for planned attempts to fix the governance of AU. May be planning a series of closed meetings with deans, faculty leaders, and student leaders.

Robyn Matthias

On the Presidential Search Process subcommittee.
Member of the Gang of 13.

Matthew Pittinsky

Chair of the Presidential Search Process subcommittee, also a member of the Trusteeship subcommittee.
Founder of Blackboard.
Was SC president and on the search committee for Ladner in 1993. Is in favor of having student participation in presidential search.

If more trustees are announced, I will add them to the list and try to have some bulletpoints up as well.

Action!

2005-11-08T20:09:00.000-05:00

My group is a big fan of action items. So here's a list of action items for you!

I already posted the events earlier today, but here's another time, because are the most important actions you can be involved in this week!

**TOWN HALL MEETING**
W/ David Carmen, Pamela Deese, Robyn Matthias, and Matt Pittinsky.
Moderated by Matt Pittinsky and Kyle Taylor (SG President)
THURSDAY @ 8, WARD 2.
This room has a 215 seat capacity. Every single one of those seats HAS to be filled.

**TEACH IN AND RALLY**
FRIDAY, NOON, BATELLE ATRIUM
Speakers to be announced.

Students for a New AU will be publishing a list of helpful questions to consider for the Town Hall meeting. Also, we will be passing out blue ribbons to show NO CONFIDENCE in the AU BOT.

Also great: The Business Law Society is webcasting today's event: Future of Non-Profits and the Law in the 21st Century: Governance in a Post-Enron, Post-Ladner World. The presentation by Jamin Raskin is notable. You can check it out here (it will require Windows Media Player).

Why are these events so important? Because the BOT think that they will outlast us. They think they can survive until interest on campus wanes, and we give up. We have to show them we still care, that we still want to be involved, and most of all, that we STAND BEHIND OUR DECISIONS OF NO CONFIDENCE.

More to come!

Key Events!

2005-11-08T13:10:00.000-05:00

I will have a much more detailed post for you at some point later today, but in the meantime...

THURSDAY! 8 PM! WARD 2!
Town Hall Meeting with at least 6 trustees! INCLUDING DAVID CARMEN AND PAM DEESE.
Moderated by Kyle Taylor and Matt Pitinsky.

More information later tonight.

FRIDAY! NOON! LOCATION SOON!
Teach-In/Rally organized by AU Faculty and Students. 5 Faculty/2 student speakers, then a rally and call to conscience. American University for a NEW AU.

In short, I have a lot coming up in an entry tonight, but I wanted to make everyone who reads this aware of these two KEY events for the end of the week.

Be back soon...

Event at WCL tomorrow:

2005-11-07T18:36:00.000-05:00

The Future of Non-Profits and the Law in the 21st
Century: Governance in a Post-Enron, Post-Ladner World

With American University in the national spotlight,
Please join us as we discuss Corporate Governance,
Fiduciary Responsibility, Transparency and Trustee
Liability.

Including Guest Speakers:

*Professor Perry Wallace, Jr.
*Dean Andrew Pike
*Professor Robert Vaughn
*Professor Jamin Raskin

Tuesday, November 8th, 2–4pm

EJF Library (1st Floor) * Coffee & Cookies * Limited
Seating

Hosted by: The Business Law Society

Raskin's op-ed

2005-11-06T13:38:00.000-05:00

First: Whoever commented, "WHY AREN"T YOU UPDATING?" -- my answer? Homework. Um, a life outside of this. It's the weekend, guys :) Some of the coolest people I know were playing a concert over in Arlington. I am a college student after all!

Second: Jamin Raskin is a brilliant, brilliant man. He wrote an op-ed piece in the Washington Post, and because I feel I should share the brilliance, here it is, full text. But you should check out the link for the AWESOME picture.

AU BEYOND LADNER

Of the many arguments floated by Benjamin Ladner in his campaign to be restored to the presidency of American University, none was more striking than the suggestion he made in this newspaper that "I've become a lightning rod because I've always been a force for change" on campus.

Now, a university president who is compensated $800,000 a year, sleeps in a university-provided mansion, travels first-class all over the world, rarely appears on campus, and who has a chauffeur, maid, social secretary, French chef and a lucrative secret contract may be a lot of things, but a force for change is not one that leaps to mind.

I work with people at AU who are real forces for change. For example, at the university's Washington College of Law, where I teach and which I know best, I have colleagues and students who have prosecuted war criminals, helped to free innocent people on death row, helped the people of Kosovo write a constitution and defended the rights of prisoners facing sexual abuse. They have also protected the public's right to fair use of intellectual property, assisted women facing domestic violence in obtaining court orders against their abusers, provided tax advice to low-income workers, helped small businesses and community nonprofits get incorporated and brought a suit against Cuba over the summary execution of three of its citizens.

Indeed, over the last few months, as the public feasted on reports of Ladner's mouth-watering 13-course dinner menu (part of one course in honor of his son's engagement: "Five Peppercorn Encrusted Baja Coast Scallop, Sesame Seaweed Salad & Orange Essence Oil), our educational and service missions continued to thrive, albeit in a way overshadowed by the president's whining and dining.

With our partners at Howard University School of Law, this fall we sent 60 students into public high schools in the District and Montgomery County to teach a yearlong "constitutional literacy" course. We sponsored important conferences on international commercial arbitration, environmental law, the campaign finance cases before the Supreme Court this term, and the Rwanda and Yugoslavia war crimes tribunals. The school also became among the first in America to invite displaced Tulane and Loyola university students to enroll for a semester, tuition-free, after Hurricane Katrina.

The American University that I know has been flourishing -- in spite of, not because of, its former president's priorities. Ladner has cited the university's rise in every official ranking as justification for his compensation package and lavish perks. Yet that rise was the work of thousands of people here who are passionate about education, scholarship and the public service mission of the university.

Ladner is not the first president to leave AU under a cloud. A colleague dropped by the other day to express his fear that the "curse of the presidents" would never be lifted. In 1994, Ladner became AU's fourth president in five years; one of those left after being caught making obscene phone calls. My colleague asked, "What do we get next? A narco-trafficker?"

For all of our dark humor and collective embarrassment, there is a serious question in this: Is there something wrong with the way the school's trustees are governing our university? Perhaps our board of trustees, whose members are drawn almost entirely from the ranks of big business, does not fully appreciate how a college president differs from a corporate CEO. The trustees were, it seems, swayed by Ladner's claims that his salary and perks were commensurate with the many-fold increase in the university's endowment and the money he raised for the beautiful new Katzen Arts Center.

But college presidents are supposed to remain committed to the teaching and ethical mission of the university while they are raising money. They cannot expect to work on a percentage basis like managers of a hedge fund. If that is the prize that motivates them, they should go to Wall Street. As Patricia McGuire, president of Trinity University here in the District, observed, alumni who give their hard-earned wealth to a university do not want the president to waste the money on himself. Many wealthy donors whose values are intact gag at crass displays intended to entice them.

When Ladner complained in an interview in October that he is a victim of the new Sarbanes-Oxley era of accountability, he paid an unwitting compliment to Sen. Paul Sarbanes, the Maryland Democrat who was the law school commencement speaker this year. If the law designed to bolster responsibility in corporate boardrooms can force university trustees to take their fiduciary duties seriously, then the legislation is reminding people in the nonprofit domain of their ethical obligations. As Ladner himself wrote in a 1999 Post opinion piece about public service and private life at the time of President Bill Clinton's impeachment, "to become a public person by assuming a public office is to submit willingly to the ethical 'overtones' of the office."

Alas, at this point, the AU board stands by the bloated "settlement" package it handed to Ladner. Since when do employees on the verge of dismissal "for cause" get the option of a multimillion-dollar sendoff? Ladner's empty threats of suing for the money were ludicrous. Would he really want to go before a jury of his peers in D.C. Superior Court and explain why a man paid $800,000 a year also enjoyed services and goods worth more than $600,000 beyond his contract perks over a three-year period? Would he really want to be deposed on all 11 years of his spending and could he convince a D.C. jury that the university was wrong to fire him?

The rise of vice among nonprofits is not unique to us, as anyone who recalls recent dubious spending practices at Stanford and Adelphi universities and piggish salaries at the United Way knows. On Oct. 27, Sen. Charles Grassley, the Iowa Republican who has been investigating financial abuses in the nonprofit world, sent a letter to the acting chairman of the AU board, which he suggested could be a "poster child" for the need for reform in that world.

And he demanded answers to the same questions we have all been asking. How much money did Ladner actually take from our university and what are the tax implications? What are the plans to audit the first eight years of the Ladner presidency? What are the board's plans to guarantee accountability and transparency in the future?

The same liberal academics who ordinarily would resist federal meddling in university affairs are welcoming Grassley's questions. If Congress, which first chartered our university back in 1893, could help us do one thing now, it would be to close the incredible gulf between the board of trustees and the rest of the university. A little representative democracy would force upon us a kind of thoughtfulness and deliberation that has been missing.

The revolt against the Ladner presidency has irrevocably changed the way business will be done on our campus. A campuswide civil society has come alive. While the trustees were polarized and paralyzed, the deans and faculties of the five colleges banded together to condemn Ladner's extravagance. Across campus, we voted "no confidence" in his leadership. The Faculty Senate acted with vigor, as did alumni.

With wit and energy, the student body petitioned, protested and demanded not only Ladner's departure but institutional accountability and democracy on the board. My three favorite signs on the quad were: "White Truffle & Porcini Egg Custard & American Sturgeon Caviar for You/Ramen Noodles for Me," "Ladner stole my bike" (a loan-strapped student explained that he couldn't afford to buy one) and the lovely "French Chef, Non/French Revolution, Oui."

We are not out of the woods yet. Four trustees who criticized the "pro-Ladner" faction for the $3.8 million parachute tossed to the disgraced president on his way out have resigned. These dissident trustees pointed out that this send-off could have paid the annual salaries of three dozen faculty members, 200 full tuition scholarships or 10 full scholarships in perpetuity.

When I told Maria, the woman who cleans my office (and helps me with my Spanish), about Ladner's farewell jackpot, she just laughed. She has worked for one of AU's cleaning contractors for 14 years. She started earning $5.50 an hour in 1991 and today earns about $11 an hour. I estimate that she makes just under $23,000 a year, or what our former president once spent on a first-class airplane ticket. For her to earn what Ladner just picked up, she would have to continue as a janitor here for the next 165 years. On campus, too, as Voltaire put it, "the comfort of the rich depends on abundant supply of the poor." Could we hope to find a college president who wants to challenge the startling inequalities of American life rather than take advantage of them?

The message of Ladner's presidency was "L'Universit, c'est moi." The point of the opposition has been, "L'Universit, c'est nous." In this sense, the campus rebellion provoked by the Ladners' decadence has been cathartic and promising. We have learned the price of passivity.

As Ben Franklin used to say: "If you make yourself a sheep, the wolves will eat you." The people who love American University as a community of learning and social engagement have risen up against our culture of closed governance. There is no going back now.

Author's e-mail:

raskin@wcl.american.edu

Jamin Raskin is a professor of constitutional law at American University's Washington College of Law and director of its Program on Law and Government. He is former chairman of Maryland's Higher Education Labor Relations Board.

Today's Wash. Post Article

2005-11-03T03:12:00.000-05:00

One of the benefits of being kept up late at night is seeing the next day's Post articles when they go up on the website. So here's today's article... and I'm probably going to be eaten alive for my quote, but I am going to stick by it. It was a good first step. It was a TINY step, but a good one in at least opening up communications. That statement should have a lot of modifiers on it, such as in context of meeting with a board that we have no confidence in, etc, but a good step is a good step, and I'm going to stick by it. We do not want to close all lines of communication in the pretty-decent-chance (I can't give odds or anything, but it is a possibility that we have to account for) that we are unable to have this Board kicked out.

Anyway, more rambling is pointless and merely a product of the fact that it's 3 AM. Here's the link:
Bitterness Is Still Evident at AU

Lots of things

2005-11-03T02:51:00.000-05:00

Very briefly:

First, I apologize that my meeting notes were skewed, because they were. I chose to focus on perhaps some of the more positive things that I saw, which did not exactly convey I think the strength of our message and the meeting that we had. I'm not asking for a break or anything, but I am sorry that I didn't give more weight to the other half of the meeting, when I went into the meeting assuming that it had two points: to get across the no confidence/resign point, but also to at least put a foot in the door, and tell the board: We have a huge chasm between our way of thinking and your way of thinking, and we don't trust you. If you are completely sincere in your desire for reform (which we doubt), here's how to START fixing things. That said, I believe we very clearly got across the point that AU cannot trust the Board to deal with its own governance issues and that outside forces need to reconstitute the Board (not the Board itself). There are two things going on concurrently: planning that we will get rid of this board, and planning that it doesn't happen. If it doesn't happen, and we have burned all of our bridges, we are going to be in major trouble. At the same time, we need to be strong in our message.

As I've been telling a lot of people, the students were not on equal footing with the Board until very recently. At least in our direct communications with the board, we must be civil, but strong, and use other avenues to try to have them resign, because they are not about to be persuaded by us on these matters. And that's not a practicality, that's reality. They are going to cling until they can cling no longer.

That said... I am terribly far behind on matters of updating over here, mostly because I have had a lot of things to prepare recently. I went to the Faculty Senate meeting today (as well as the 1,000,000th book celebration over at the library), and I'm going to include the text of the resolution below. I think the Faculty Senate stared to get the time frame and the urgency of getting their butts in gear, but at the same time... they need to do that. And no disrespect to Prof. Ahrens, because it's a tough job and we traded horror stories today of the lack of sleep since September, but the body as a whole needs to be able to sort things out faster. That's my biggest concern about the situation with the Senate, because I feel like everyone is moving at different speeds: we're unsure on how fast the Board is moving, but it is going at a pretty good clip, the students seem to be able to keep up the most, the deans have been pretty quick, but the faculty senate is struggling to stay on top of things. Hopefully, they did figure that out today; and it did seem that way.

As for the resolution, it passed 17-1-0.

Whereas: American University values service, inclusiveness, social justice, and the highest ethical and intellectual standards. These values, essential to our identity and taught throughout our institution, both by our words and behavior, are integral to the spirit and purpose of the University -- and have been so from its inception. They have sustained it through good times and bad, have been central to the progress of the University in recent years, will guide it for generations to come.

Today we have a particular responsibility to profess in our classes and reinforce by our deeds the idea that malfeasance should result in sanctions rather than extraordinary rewards. The Board has chosen to disregard the position of the university community that Dr. Ladner should receive no "golden parachute." Instead, it has agreed to a severance package which can only be described as grossly excessive, reached by a procedure that was clandestine, covert, and in camera, withheld any opportunity to discuss and debate it, and was inconsistent with the Board's prior promise of openness and accountability.

Therefore we resolve that

(1) the Faculty Senate condemns as excessive the severance package reached by the Board of Trustees with former President Ladner.

(2) The Faculty Senate expresses its lack of confidence in the Board of Trustees as currently constituted and calls for (a) a thoroughgoing reform of Board governance before the Board undertakes a search for a new president, (b) adoption by the Board of twenty-first century governance practices, for the whole and in its committees, that embrace transparency, accountability and participation, (c) a thorough restructuring of the Board's Charter and By Laws, and (d) giving these matters the highest priority in the Board's upcoming agendas, all in order to put behind us the continuing crisis it has created.

American University is strong and resilient. We are proud of its components: our students, faculty colleagues, administrative staff, our academic programs, and out contributions to the discovery of knowledge. We are confident of its future. We are encouraged by the Board's letter of apology to campus. We look forward to working with a reorganized and revitalized Board of Trustees to continue the advancement of this great University.

Meeting w/ Mr. Abramson

2005-11-01T19:39:00.000-05:00

Here’s my update post-meeting with Gary Abramson. Just as some background, I knew nothing about him before I went into this meeting beyond his association with the Ad Hoc Committee… and I cannot even say how close that association was. The meeting did not focus on the settlement, per se, but more on looking at governance and the Board of Trustees itself. Some points that we brought up:

We would like to see students and faculty on the Board of Trustees. His reaction was that the investigation re: governance, the communication with the Association of Governing Boards, etc. needs to happen. He does not predict any new members on the Board until at least January, if not later. He wants to “take care of our own house” before adding any one new. (Our response to this was essentially, but how can we trust you to take care of it judging by your track record, and in light of all the votes of no confidence in the board?)

We would like to see students (one undergraduate, one graduate, one law) on each subcommittee of the board, with a vote. Gary’s response was that he personally agrees, and will say so, but he is going to leave it up to each subcommittee to figure out how to add student members (and if they can vote or not). This is a significant step in the right direction.

Regarding specific governance reforms, he would not get into most of the specifics, because he’s waiting on the reports on best practices, etc. But we did impress upon him the request for students and faculty on the board, our concern with the Board reconstituting itself, the lack of a clear formal review for Trustee members, and a few other smaller things. He listened, and there was a note-taker taking notes for him, so it’s all there for him to bring back to the Board.

We briefly talked about the Senate issues, and he would go no further than to say that the Board is not worried about it, that there are no secrets to hide, and they are giving them all the information that the SFC wants.

We talked about a lot of communication issues, and notably the town hall format, which we worked on convincing him that it’s a necessary step. Will Mount had a great point that it is psychological more than anything else, because it shows that the Board really is trying to reach out to the whole community.

Gary was quick to downplay the role that the Post has played in this, and to say that it is only one side of the story, etc. He said that the Board was bound to confidentiality… we told him that they should have specifically told us that in a campus-wide communication to make sure that students understood that.

I asked for a list of the Board members on each subcommittee, and that information should be heading out tomorrow, hopefully.

We were trying to also impress upon him that the culture of the board currently does not seem very friendly to students. This was also getting into the town hall meetings, but a brief discussion w as also had to try to get Trustees to more student and campus events: for instance, a “Take a Trustee to School Day” (which is something I’ve been trying to figure out logistics for awhile), in which a Trustee would be assigned to a student, attend classes, meetings, meals at TDR, experience dorm life, etc. Gary seemed almost delighted by the idea, which shows that the Board could very well be starting to back up their earlier statements about being more involved on campus.

Gary also wanted to talk about time frame: he said he hopes to have the governance issues resolved within a few months (and though this wasn’t stated, I feel that the gist was before the new year), then start moving on new trustees and the presidential search.

All in all, I thought that the meeting went well in terms of communication. It’s a step in the right direction, and while I am still more than hesitant to put my confidence in the board, they have started to move in a more favorable manner. As we are going to write in a letter to Gary tonight, “Ideas into Action, Action into Service.” We’re starting to see the ideas. Now we need the action, and the service. Hopefully, we will get that. There is still a lot of work to be done on both sides of the table.

Very quickly

2005-10-31T23:42:00.000-05:00

Quickly, because Monday has lasted forever... and actually, now it's Tuesday. Hm.

Tomorrow a group of student leaders will be meeting with Chair Gary Abramson. I have been invited to this meeting. The official purpose to address any questions about the settlement and to then start discussion on governance. If you would like to leave comments here, I will keep them in mind during the meeting, and try to voice concerns as best I can.

We are hoping that there will be a town hall meeting with at least one trustee sometime this week. As in, the entire school is invited. So, when the announcement is made, I'm basically asking you guys to show up. to ask the tough questions, and to show the board that this is a process we want to be involved in, but that we also want the governance question resolved before any major decisions about the new president are made.

Related to this, we will be tabling Tuesday through Friday between 12-4, when we can the people there. We will be raising awareness about the Town Hall meeting, and also starting on engaging people by providing a jumping off point for questions for the Board members.

Sound good guys?

I'll try to post tomorrow with some thoughts post-meeting. In the meantime, hope you all sleep well and everyone (well, everyone who is a student at least) has completed their homework for tonight. Happy Halloween!

I almost forgot. Here's the link to the Editorial in the Post today: Rethink the Ladner Deal. And something else as well, a Letter to the Editor.

Some thoughts and a link

2005-10-29T12:13:00.000-04:00

If you haven't read Sen. Grassley's letter to The Board, it's hosted at the Washington Post and also at the Finance Committee's website (currently second item down). It's a PDF file both times, just to warn you.

My thoughts on the Senate thing are pretty simple... it's going to work. It's not bad press for American University, it's bad press for the Board of Trustees. A distinction MUST be made between the two entities. The Board of Trustees does not represent American University. Simple. End of story. American University as a community... our deans, our faculty, our students, our staff, our campus as a whole, is strong, and perhaps stronger than ever. Not only are the students of American University learning a lot, but everyone here is... other schools are learning their lessons. AU is not the joke here, the Board is, and Ladner is.

A professor-friend called this situation "an eminently teachable moment." And I completely agree 100%. We just need to make sure we aren't the only ones learning the lesson.

Good news!

2005-10-28T00:27:00.000-04:00

50th post, and some good news.

Senate Panel Requests Records From AU on Ladner and Board

In a four-page letter, Sen. Charles E. Grassley (R-Iowa) asked for details on all no-bid contracts over $100,000, copies of all correspondence with the Internal Revenue Service for the past five years, biographies of each trustee and documentation of how the board made certain decisions.

AU is the first college to get an inquiry letter in an ongoing review of charities led by Grassley and Sen. Max Baucus (D-Mont.), and it broadens the scope of the committee's oversight. "It appears the AU board could be a poster child for why review and reform are necessary," Grassley wrote in a letter sent to the acting AU board chairman, Thomas A. Gottschalk, yesterday afternoon.

Please please, continue signing the forms. We will be tabling between 12 and 4 tomorrow in MGC with laptops as well, if you'd rather do it then. In the meantime, it's only a link away.

INFORM CONGRESS!

Why is this good news? It's above the Board. They're finally going to be held accountable by someone with real power. Also, AU can set an example, which is not necessarily a bad thing. If we truly turn this school around and SHOW that we're a strong community, and that we CAN do what's right, then I think we will get a lot of respect. BU went through something similar, and yet I can't think of anyone from back home who thinks of that first when they think of BU (I actually think of the McDonalds there, because they have one of those policies where if your food isn't ready in under 90 seconds, it's free -- lemme tell you, AU's McD's could use some of that same speediness).

P.S. Editorial/Opinion in USA Today mentions us as well...

Listserv up

2005-10-27T22:23:00.000-04:00

I gave up on OIT setting up a listserv, so I set up a Google Group for Students for a New AU. If you're interested in joining (and PLEASE, only those who are serious), come join. I have to approve each membership, so if I don't know who you are, expect an email first.

We welcome students, faculty, staff, parents, alumni, pretty much anyone who is interested and connected to AU in some form. But please join only if you want updates on the group, and you want to help out.

Thanks guys.

In response...

2005-10-27T19:40:00.000-04:00

I had a very lengthy response written to the letter sent out today over Today@AU by Tom Gottschalk and Gary Abramson. And then Blogger ate more than half of it because of an HTML issue. Sigh.

So, to summarize my thoughts, since I should be writing a paper.

First, this is too little, too late. The Board is reacting to the letter from Leslie, Paul, Len, and George, they're reacting to the media, they're reacting to all of the schools' and groups' statements. There is a tidal wave going against the Board, and this is their attempt to placate the AU community. For me, however, this did the opposite. In the letter, they admit they would have fired Ladner "for cause" had he not taken the sweet resignation package they offered him. And only a fool wouldn't have taken it. It's bad enough that they padded the amount they gave to him, but what's worse, and much more offensive, is that they gave it to him at all. The Board, completely untrustworthy as it is, was still smart enough to pull it together and decide to 1) fire him for cause, 2) declare Ladner an "at-will" employee and the '97 contract invalid, and 3) determine that he should not receive a severance package. But they decided to be nice: offer him one last chance to resign. And regardless of what they say, this was not out of fear of litigation (Gottschalk said in the faculty meeting on Monday that there was a "Strong" chance of winning, although no lawyer would ever say a case was "iron clad") but instead out of that same misplaced loyalty for Ladner.

Furthermore, they've decided to add insult to injury by trying to move onto the Presidential search without fully focusing on their own internal problems. Ah, Gottschalk says, we have a subcommittee for governance! Well, we all know that. And you also say that you want to be more involved on campus. Yet, there are no students on this subcommittee, no faculty, no staff. Sure, you might not trust the students, fine. With your track record in mind, that's not surprising. But how about a faculty member or a staff member? Surely, they are people on campus who have the "Specialty" knowledge you're looking for. I'm not going to trust the Board to reform itself when they've shown no indication they want to change. Every single decision they make looks the same: ethically and financially stupid. If I was a Presidential candidate looking for a job at AU, I would love the community that I see after this event... the way the deans, faculty, students, and staff have come together after this crises. The only thing that would make me hesitate is the Board. AU is strong, the Board is not.

The Board is on the run. With every resolution passed, with every student's comment that they can't be trusted, they lose ground. They know that the AU deserves better. And this Board will never, ever, be able to deliver that.

Letter from Gottschalk and Abramson

2005-10-27T19:36:00.000-04:00

TO:

AU Community

FROM:
Tom Gottschalk, Acting Chair, Board of Trustees

Gary Abramson, Chair-Elect, Board of Trustees

SUBJECT:
Resolving the Past, Improving the Future
_____________________________________________

We want to share with the campus our perspective on what we as officers
of the board have learned from what has become a very emotional and
highly charged issue. We also want to make clear our commitment to
improve board governance and provide leadership and direction to the
university.

We hope this communication and the ensuing dialogue with the community
will be considered not only responsive to the faculty resolutions and
student expressions of concern, but also to what we see as our
responsibilities as trustees of this great university.

Apology to the Campus

First, we want to be clear. We are chagrined that the board’s own
processes over the years did not allow us to have a clear understanding
of what contracts were in place, their provisions, and the various forms
of compensation which the president was receiving. We acknowledge this
deficiency, and we apologize to the entire community for it.

Had we been more vigilant and had more robust processes, the situation
we have had to confront might never have occurred. The board has
resolved to do better, much better, in the future—to be a board fully
worthy of the fine institution to whom its care is entrusted.

This controversy has placed a great strain on the university and the
board. Many in the greater university community respected Dr. Ladner as
an effective leader under whom the university prospered. Applications
tripled. Selectivity improved measurably. The endowment grew eight times
in size in one decade. Most importantly, the national stature of
American University improved in external rankings thanks to the quality
of the faculty and the students attracted here.

The 23 trustees wrestled with the allegations against Dr. Ladner and the
record of university performance during his tenure out of fairness to
him, but most of all in fairness to the university and all its
stakeholders. This was made more difficult by ambiguous contract issues
and blurred boundaries of conduct appropriate to the president on behalf
of the university. Notwithstanding vigorous internal debate and too
often public disagreement, the board followed the appropriate process of
an independent review by its Audit Committee aided by professionals,
acceptance of the committee’s report and recommendations, a
determination that Dr. Ladner under the circumstances should not
continue in his leadership capacity, and ultimately that he should
resign his employment or face termination.

Our Decision to End the Controversy

We will not here revisit all the arguments which we fully considered in
deciding whether to risk probable litigation between the university and
Dr. Ladner or, instead, to resolve all disputes and avoid altogether the
risks, costs, and delay inherent in litigation.

The board did agree that there had to be a limit to the consideration
which might be paid to Dr. Ladner were he to agree to resign and release
all claims against the university. The board held two sessions where it
heard the strong views from the campus that he not receive a “golden
parachute.” We also heard from the campus that it wanted a prompt
resolution of the controversy.

Hence, the board debated and decided what its final and best offer would
be. We gave Dr. Ladner approximately three days to accept or reject it.
That offer had a one-time severance payment and allowed him to retain
previously awarded retirement funds which had accrued to his benefit.
Had he rejected it, the board was prepared to accept litigation as the
only alternative.

In reaching our decision we received and relied on the advice of counsel
from two prestigious law firms who were selected specifically for their
expertise on tax and litigation matters. These counsel advised us that
each issue in the university’s relationship to Dr. Ladner could be
contested as part of any litigation, that there could be no guarantee
the university would prevail, and that the litigation which would likely
ensue would be costly, lengthy, and potentially disruptive of university
operations. Finality is something lawyers and the board had to value as
an important benefit of a prompt and comprehensive resolution of the
controversy.

Moving On and Moving Forward

There are many lessons to be learned from this episode so we can try to
prevent history from repeating itself at American University. We haven’t
identified them all yet. But, among them:

The need for the trustees to be less isolated and insulated from the
campus and to have a better understanding of the concerns and
priorities of all who work and learn here.
The need for improved and more inclusive governance. To this end, the
board has formed a Governance Committee which will reach out to
include all university constituencies in its work. The board is
supportive of initiatives by the university community to develop and
communicate suggestions to meet this need, including principles of
governance, board structure and composition, operating procedures,
agenda prioritization, and other aspects of governance.
The need for the board to be more vigilant with respect to financial
matters, including but not limited to compensation. We have made a
good start on this, but there is more that needs to be thought about
and developed.
The need for the board to be more transparent in its discussions and
decisions. The Governance Committee will involve campus
representatives in developing recommendations in this respect as
well.
The need to assure that the board itself, as a matter of leadership,
reflects the values of the university in its work and processes.

We are concerned that some donors who identify with Dr. Ladner may
withhold their contributions, just as other donors may do in reaction to
headlines and emotionally charged statements in the media. We will
encourage the trustees who are continuing on the board to do all they
can within their means and ability to support the university themselves
and to encourage other donors to do likewise.

The campus needs now to come together in conducting a professional
search for a new president. We want be united in our expectations, as
well as in our commitment to support whomever emerges as the successful
candidate for this most important position. Trustees will be meeting on
campus next week with faculty, student, and other campus representatives
to consider how such a search should be structured and conducted.

However long that process takes, we want to express our support and
appreciation to Neil Kerwin, Ivy Broder, the deans, and other officers
and faculty for the continuing strong leadership they have provided to
AU throughout this difficult period.

We do not expect to convince all those who have disagreed with the
board’s actions that we were right in all that we did. We do ask that
you respect that our actions were taken with fidelity to our fiduciary
obligation to do what we sincerely believed as a matter of conscience to
be best for the university and in its long-term interest. That we were
not always unanimous within the board reflects that reasonable people
can disagree on these issues and do so on principle as well as
practicality.

We respect those who disagree with our actions, but we hope that their
disagreement will not prevent them from working with us to avoid any
future repetition of the mistakes of the past and, above all, that they
will help all of us to keep American University moving forward to
achieve its educational mission more fully than ever before.

Eagle Online Links

2005-10-27T18:40:00.000-04:00

The Eagle had a lot of coverage today... here are the links. (Check out that awesome U-Haul. Sorry, I just loved that truck. I want a U-Haul for everyday life. They're so much fun to drive.)

Ladner takes $3.7 million to sever all ties with AU
Former AU president Benjamin Ladner accepted a severance deal this week that will cost the university almost $3.8 million but will avoid a potential legal battle, university officials said.

SG lobbies Congress to protect higher education
Student Government President Kyle Taylor is encouraging students to send letters to their Congressmen and women to protest former President Benjamin Ladner's settlement package.
Staff Editorial: Ben Ladner's platinum parachute opens wide
The sweetness of Ben Ladner's dismissal from AU has been soured by the board of trustees' recent decision to award his dishonesty and unethical behavior with a $3.75 million severence package. He will receive $950,000 in compensation, as well as rights to a $1 million life insurance policy and $1.75 million in retirement funds.

Ben Ladner's New Joke on AU students
There's a new joke being passed around the halls of American University these days. It goes something like this. How do you know when your University's Board of Trustees have been corrupted? When you wake up in the morning and Ben Ladner's there to pee in your corn flakes because he stole your milk money.

Letters to the Editor
Wow. So Ben Ladner signs a contract that was never approved by the Board of Directors, then rips the school off for hundreds of thousands, if not millions, of dollars, until the scandal is discovered and he is fired. Now the board wants to give him an extra $4 million? Way to get tough, guys.

Some more media links

2005-10-26T21:28:00.000-04:00

DCist: DWU Professor Suggests Ladner Lawsuit

WTOP Radio: Controversy at AU Far from Over

AARCRAO Transcript: Former AU President Gets $3.75 Million "Golden Parachute"

GLC Resolution

2005-10-26T20:38:00.000-04:00

This evening at a Special Meeting of the Graduate Leadership Council, the following resolution was passed by a 4-0 vote (the Kogod president was unable to attend):

"We, the Graduate Students of American University, are appalled at the compensation package that the Board of Trustees has given Dr. Ladner. We condemn and denounce in the strongest manner the opacity under which this board operates. We call for the immediate reconstitution of the Board of Trustees in consultation with the faculty, staff, students, and alumni of this University. Additionally, we call on the Board to cease all searches for a permanent president pending such reconstitution. At such time, we strongly call for broad student representation and participation in the presidential search. Finally, we strongly encourage institutional governance reform in collaboration with all campus constituencies."

WCL resolution

2005-10-26T11:21:00.000-04:00

RESOLUTION OF THE FACULTY OF THE WASHINGTON COLLEGE OF LAW (WCL)

The Faculty of the Washington College of Law condemns the decision of the Board of Trustees of American University to offer a multimillion dollar settlement to former President Benjamin Ladner, and expresses its lack of confidence in the Board. The Board’s decision represents a waste of university resources and betrays the educational mission of the institution. The reported settlement entered into by the Board is a violation of its legal duties, and should be revoked.

Only a thorough restructuring of the university’s system of governance, emphasizing transparency and representativeness, can put behind us the continuing crisis created by Mr. Ladner’s and the Board’s actions. Therefore, the Faculty urges that no search for a new President takes place before the systemic issues of governance are addressed and resolved.

Unanimously adopted by the WCL Faculty on October 25, 2005.

Wednesday's Post Article

2005-10-26T00:50:00.000-04:00

OK, I lied, bed was not meant to be right off the bat. Here's the latest from the Post, including an update on what each school has done.

Ladner Package Outrages AU Campus

Of random interest, they're back to using the "grumpy-face" picture of Ladner on the website.

The School of International Service Council unanimously voted no confidence in the trustees, called on them to resign and asked for reforms in governance. The council asked them to rescind the severance package or recover the funds and voiced support of efforts by members of the AU community to enjoin the board from moving forward with the settlement.

The faculty of the Washington College of Law voted to condemn the settlement, calling it a waste of university assets and a betrayal of the school's educational mission.

The Kogod School of Business faculty passed a resolution saying it was disappointed with the departure package and wanted the board to focus on a new governance system that would be more inclusive of school constituencies and be more transparent.

The School of Communication faculty expressed its deep concern over the settlement, particularly the $950,000, "especially if this money is being given to him so he can repay the university for his excessive spending."

The communication faculty also admonished the board for its lack of stewardship of the university and urged trustees to create an independent panel to study the governance structure, asking for more transparency and accountability.

Contact Congress

2005-10-26T00:35:00.000-04:00

There are very few things above the Board of Trustees, and most people will tell you there are none. That's not entirely the case, however... Congress was the entity that chartered the school. They have amended the charter as recently as 1996. They could easily look into this situation now and remove the Board.

So tell them what you think. Here's a handy link:
http://www.demaction.org/dia/organizations/AUSG/campaign.jsp?campaign_KEY=1402
to target your representatives and the ones who would be looking into this. It emails/faxes them for you after you input your information, just like the things the HRC, etc. have.

As this is put into place, I'll keep you updated, but obviously this is Kyle's thing and we are only helping. I know something is going up on the AU SG website (ausg.org), but I'm not sure if its everything or just a link, but I'll post it when it happens.

And on that note, I retire for the night. And it's even before 1 AM!

Quick link to NYT

2005-10-25T22:36:00.000-04:00

New York Times: President of American University Agrees to Resign

SIS council info

2005-10-25T22:34:00.000-04:00

School of International Service Faculty Council

“Resolution passed by a special meeting of the SIS Council, October 25, 2005
Resolution passed by a vote of 34-0

The SIS Council:
*Calls upon the Board of Trustees (BOT) to rescind the settlement or recover the funds,
*Expresses no confidence in the BOT,
*Calls for the resignation of the current Board of Trustees,
*Supports efforts of members of the AU Community to seek an injunction against the Board of Trustees to prevent it from moving forward with the settlement,
*Supports efforts to reconstitute the governance policies of the University

Having Resolved:

1. The School of International Service Council condemns in the strongest of terms the settlement reached between the American University Board of Trustees and Benjamin Ladner. American University should spend money only to support the educational mission for which the University was founded. Rewarding Benjamin Ladner for his malfeasance is contrary to our mission,moral values and standards. The American University Board of Trustees should rescind immediately any offer of severance and dismiss Benjamin Ladner for cause.

2. Members of the Board of Trustees who bear responsibility for the drafting and flawed execution of Benjamin Ladner's 1997 contract, lapses in auditing, and the October 24 settlement should resign from the Board because they have clearly demonstrated a complete lack of understanding of the mission, standards, traditions and values of American University. They have also failed as fiduciary stewards of American University.

3. The flawed decisions and processes of American University's Board of Trustees underscore the necessity of undertaking a thoroughgoing reform of Board governance. The goal of the reform should be the adoption of twenty-first century governance practices that embrace transparency, accountability and participation. As part of the reform process, the University should carry out a best-practices study of outstanding North American universities.

4. Before embarking on a search for a new permanent president, American University must put its house in order. Specifically:

- A new governance structure for the Board of Trustees that reflects the
will of those who study and work at American University must be developed
and implemented. Only a reformed Board of Trustees would have sufficient
confidence of the faculty and staff to undertake a presidential search
successfully.

- A new compensation procedure for the University president and vice-presidents must be introduced that ensures that University officers are compensated consistent with market rates found at peer institutions.

- A transparent, rigorous and regular auditing system must be developed and
adopted.

- The University must adopt full transparency in the process and contents of
budgeting.

- The University executive must be pared down to its essential mission of
managing the University. All programs and positions that do not contribute
directly to that mission should either be eliminated or transferred into the
most appropriate teaching unit.

The acting University president should be tasked with achieving these
objectives over the course of the 2005-2006 academic year. The University
can then proceed in the fall of 2006 on a sound footing with a search for a
new permanent president.”

Our Statement re: settlement/Board of Trustees

2005-10-25T20:52:00.000-04:00

October 25, 2005
Official Statement from Students for A New American University

We strongly condemn the decision made by the Board of Trustees to offer Dr. Benjamin Ladner a multi-million dollar settlement. As students who fund 90% of the operating costs of our university, we demand clear channels of communication and objective information. We are outraged by the current misinformation that the Board of Trustees has provided to the AU community. The inadequate method and final results of the settlement show that the Board of Trustees cannot be trusted with its governing, fiduciary, and ethical responsibilities. The Board of Trustees has consistently shown that it has no inclination of becoming a transparent and accountable governing body. We maintain our position of no confidence in the Board of Trustees and call for all members of the Board to resign. The Board of Trustees does not and cannot accurately represent the values of service and integrity of American University. The University can only move forward through extensive restructuring and reform.

Post...

2005-10-25T18:18:00.000-04:00

Quickly, the Post article is moving up in the world... originally on the main page, it was under "more headlines" but now it's right under the Rosa Parks coverage... I wonder what that means? It's still in the list of the top-5 viewed articles for the Metro section.

An Open Letter from 4 Ex-Trustees

2005-10-25T17:27:00.000-04:00

An Open Letter to the American University Community

We write to set the record straight. The golden, now platinum, parachute given Ben Ladner is not a mere $950,000 the Board of Trustees has disingenuously claimed. It is the entire $3.75 Million reported in the newspapers. Each and every dollar is a gift. The University owes Ben Ladner nothing.

First, the Board has placed itself and the University in the midst of an outrageous and expensive inconsistency. The Board is on record as having determined at its Board meeting October 20th that Ben Ladner was an employee at will, with no contractual rights against the University and that Ben Ladner should be discharged for cause. Notwithstanding these findings, the Board gave him $950,000 as severance. There can be no more contradictory positions. To be consistent and to fulfill its fiduciary obligation, the Board had only one option and that was to give Ladner zero, as the four of us have repeatedly urged.

Second, the Board only tells half the story regarding the insurance policy. Yes, Ben Ladner was entitled to the $1 Million in the split dollar policy. But he was also obligated under the policy to repay the University the premiums it had paid on his behalf. Because the investments in the policy were quite unsuccessful, the policy's value was almost exactly the same as the premiums owed. Thus, the University owed Ben Ladner $1 Million and he owed the University $1 Million in premiums paid. Accordingly, he was owed nothing. Giving him the policy without asking for the premiums back is exactly the same as writing him a check for $1 Million.

Third, the reference to $1.75 Million in two trusts is flat-out misleading. Here's the true story. Ben Ladner had $1.75 Million in deferred compensation which did not become his until 2010. Between now and 2010, he risked losing all of it, 100%, if he were to be fired for cause. Since the Board determined at its last meeting that he should be fired for cause, allowing him to resign is effectively a gift of the $1.75 Million. Had principle and not expediency carried the day, the University would have kept each and every cent of the $1.75 Million.

But that is not the whole story. Remember he misspent over $125,000 for purely personal enjoyment. He also misspent almost $400,000 which the audit committee in its generosity called imputed income, giving Ben the benefit of calling the invalid 1997 contract valid. Now that two law firms, University counsel and the Board itself have opined that the contract has no merit and was neither authorized nor ratified, we can add this amount to the list of misspent University money. Add to this the over $1 Million that the investigation cost. Thus, the true dollar cost is over $5 Million. And this is only part of the damage. Because of Ladner’s behavior, an ethical cloud hangs over the University. The School has become the target of jokes and criticism. And most importantly, several significant donors have withdrawn pledges and we assume more will follow. After all, who would want their donation to fund a reward for bad behavior?

We dismiss the Board’s alleged fear of litigation as a mere excuse for the Board's largesse. It is totally without merit. First, principle should rule. There should be no deviation from the only guideline to be followed - wrongdoing must not be compensated. Second, we repeat that the Board has three legal opinions that the 1997 contract has no validity. The Board has adopted this position. The insurance policy is clear. Ben Ladner owes the University the premiums. There is no ambiguity in the deferred compensation arrangement. Ben takes nothing if he's fired for cause. Third, the cost of litigation to the University if pursued by Ladner would be only a small fraction of the severance package just awarded to him. The University has in-house counsel and we are certain that the law school faculty would provide any additional assistance needed.

We are dismayed not only by the amount of the platinum parachute, but also by the way it was determined. The students, the deans, the faculty, and donors should have been heard before a decision was made. The trustees only worsened the matter by holding their meetings in secret and demanding oaths of confidentiality. We now know why. They needed to hide behind a cloak of secrecy to avoid listening to dissent, to conceal as long as possible their goal to put Ben Ladner's demands first and the University's needs a distant second. If this is the Board's new approach to governance and transparency, we are certainly glad that we are no longer part of it.

The Board has significantly worsened an already sad chapter in the University's history. It has lost sight of its true constituency - the students, the faculty and the alumni. The Board has given $3.75 Million to an undeserving individual. Had it earmarked this money for the deserving, Ladner’s platinum parachute could have funded the salary of over three dozen faculty members for a year; provided for almost 200 full tuition scholarships for a year; and provided in perpetuity 10 full scholarships. This is where American University's resources should go and that is why we voted for no money for Ben Ladner and why ultimately we sadly resigned from the Board.

Sincerely,

Leslie E. Bains, former Chair of the Board of Trustees
George J. Collins, former Chair of the Board of Trustees
Leonard R. Jaskol, former Chair of the Audit Committee
Paul Martin Wolff, former Trustee

SG statement from Kyle Taylor

2005-10-25T17:20:00.000-04:00

The Student Government would like you to know that former-President Ladner’s real settlement totals $3.8 million in compensation. This leads us to question whether or not this Board, with close ties to Ben Ladner, accurately represents the values of our University. We the students provide 90% of the operating budget for this University, and thus deserve objective information from our Board of Trustees. As your representatives, we are determined to seek it out.

Today's events

2005-10-25T12:41:00.000-04:00

OK, first off... today is going to be the information game. There are back-up plans, and they are mostly what someone just commented with. There's groundwork for walk-outs, there's groundwork for contacting Congress, there's groundwork for a class action lawsuits. Whatever we have to pull out, we're ready for it. And this isn't just my group, there are faculty, deans, and student government working at some level on these plans. So don't fret yet... we just need to see what deck of cards we're playing with first.

That said, SIS is the only school having a council meeting today. So if you are an SIS student, and you are otherwise not doing much at 2 pm, go to the SIS lounge to see what your school is saying. This is going to be a meeting primarily for the dean and the faculty, but students are welcome to attend.

I've been trying to get info on the other schools, but it looks like the others will not be having council meetings (so you should ENCOURAGE your professors to ask for one). Kay from CAS met with dept. heads this morning, so CAS is heading in the right direction, but SPA seems to have no plans. Please please encourage your school to have a council meeting.

In disappointing news, Tony Ahrens has cancelled the extraordinary meeting of the Faculty Senate planned for this Wednesday. I understand the need to have more discussions amongst each school, but I feel that that could have still effectively been done today with council meetings, as SIS is proving.

I shall try to provide an update after the SIS meeting with the results, etc. In addition, more information is coming to me today and I am trying to find out what can be made public and what cannot be.

SIS people, see you at 2!

Last update of the night

2005-10-25T00:42:00.000-04:00

Since I am simply about to pass out, I am so exhausted.

First, I know it's going to be hard to keep the students interested. I do not view today as a "victory" by any stretch of the imagination. I have a lot of concerns with the numbers and where they are coming from. I have concerns with the $950K number and possible inflation, I have concerns that Ladner should not be getting any of the premium involved in the life insurance, which is a $1 million figure, I have concerns about the if the trusts have been vested (as Ladner has claimed), the taxes on them, if he can claim them, etc. These are complicated (and rather boring) issues... the deans and faculty will be asking these questions over the next 48 hours, as will student government.

I guess I'm just asking, please, withhold judgment. Yes, it's a settlement, and it could be worse. But if they're giving us these numbers, and they are basically inflated, or they're possibly padding it by a million or two, this is not a victory. It's going to be an information game in the next 48 hours.

The questions that the deans/faculty/student leaders will be asking tomorrow basically revolve around each of the three main parts of the package:
1. Where the $950K figure is coming from, if the amount has been inflated to compensate for what he's losing, the reference to the severance package for cause for faculty/staff.
2. Life insurance: is Ladner getting both the premium and the appreciation of the amount AU has put in for him? (Imagine it is not insurance, but stock. AU buys stock for Ladner, and holds it in his name... he is able to get whatever the stocks make, but not the stocks themselves. He should not be getting the premiums, as that is not money directed to his earnings).
2. Trusts: Gottschalk told the faculty representatives that they would have had a "Strong case" to litigate against Ladner. They had already drafted a statement firing him "for cause of dishonesty" if he had not accepted. So why are we settling at all? Furthermore, Ladner says the trusts were vested 2 years ago... he has not been paying taxes on this if it did happen, but G. said that they were set to vest in 2010. What are the policies on vesting them now, etc?

That's what we're looking at with the settlement itself. As for the board, I think everyone agrees that it needs to reform dramatically, and we are not stopping on that. There has been a task-force created to examine the bylaws... there is one with students, and the faculty senate is also looking at them.

Basically, there are a lot of actions in the works... but there's going to be a brief period where nothing much happens besides some talking and comparing of notes. So in the meantime, don't start your celebrating yet.

Sorry to be the bearer of bad news, and you can, by all means, disagree with me. But personally, I am not yet convinced of this, in any way.

Post covers

2005-10-25T00:24:00.000-04:00

Just as a brief interlude, the Post has gotten their article online already (With a fun picture of our u-haul!).

Ladner's $3.75 milion deal severs ties to AU

Aw, man, check out that U-haul.

OH! It's been updated since I first read it: Ladner has spoken! I'm working to see if that's the extent of his statement or if there is more.

In a statement sent by e-mail last night, Ladner said: "Nancy and I will always regard the opportunity we had to serve American University for eleven years as a great honor and privilege. We are especially grateful for the quiet but strong support expressed by so many friends, colleagues and students."

In other news from this article, George Collins has also resigned. Which means hopefully tomorrow I'll have a letter posted (although I'm not sure, to be honest, if he has one).

Last night, another trustee resigned, saying he could not accept the deal. "It is too excessive," said George J. Collins, who was one of only a few trustees who voted last week to give Ladner nothing. "Unfortunately, my position was the minority opinion."

Collins joins three trustees who have left in the past 15 days with public statements criticizing the majority on the board who, Collins said, "put Ben Ladner before American University." A fourth trustee recently resigned citing demands at work.

OK, my reactions next. I'm trying to be in bed by 1 AM, as I have to TA a class tomorrow at 9:55, so I might make them brief, but yes. Soon.

Notes - mtg with Gottschalk

2005-10-24T23:36:00.000-04:00

I must emphasize... these are not my thoughts. These are the notes that I took during the meeting... therefore they are mostly expressing the views of the Board, and as they were explained by Gottschalk. If I have a comment (which I shall try to refrain from until my next post) it will be in red. G. = Gottschalk, since his name is impossible to type repeatedly.

Part I. Introductions, etc.
* Concluded negotiations with Dr. Ladner; G. to explain as much of the rational as he can.
* Settlement in its nature means that neither side is happy with it; attempt to avoid litigation; a prudent step for the Board to take.
* Aware that the campus disagreed, esp. students; the board did keep this in mind.
* Ladner is resigning effective today; has cut ties; everything; no tenure. "He is leaving altogether."

Part II. Severance
* Gross $ number is 950,000.
* 2005 salary + bonus = $725,000 (bonus = $225K)
* Slightly more than a one-year severance.
* So the gross number is 950K, from that 3 deductions: 1) $134,000 for money he owes AU per the audit committee; 2) income taxes (46%) on all 950K; 3) the amount AU would have withheld for tax purposes on the $398K that he has to report to the IRS (25%).
* Any faculty/staff member fired for cause is given a year's severance (Meg's comment: Where? Where is this given? This was told to the faculty as well, and the phrase "for cause" was used. This, as far as we all could tell, is not true.)

Part III. Deferred Income.
* Ladner has worked for 11 years.
* The 1997 board approved two things (independent of the contract, which was not done by the board as a whole): 1) a deferred income system, and 2) a split dollar life insurance policy. This was all done on the table... the whole board knew of these two things (a point will be made later about the contract).
* Part A: Split Dollar Life Insurance. The current balance is currently somewhere slightly under $1.1 million. Ladner is to be given this balance, plus the annual premium for the academic '05-'06 year. (Meg's comment: I am going to have a lot to say about this later on.)
* Part B: Trusts for deferred income. It's split into two trusts. Both are fully taxable at the 46% rate. Together they total $1.75 million. (Meg's comment: Again, questions on this later.)
* G. was very careful to make clear that the 2.75 million from the insurance/deferred income is not new tuition money (though the $950K is from the tuition reserve)... it is money already spent by the university.

Part IV. Additional Details
* 90 days to vacate house; $20,000 for relocation, i.e. "actual moving costs." G. mentions U-haul and can't help but smile.
* '97 board did approve the insurance and deferred income packages, but while unaware of the secret contract. In hindsight, "insurance policy was a dumb idea."
* Ladner's actions are destructive to his repuation, G. expressed doubts about his being hired by any prominent entity.
* IRS/DOJ/FBI investigations have no impact. This is a done deal, clean break, "those problems are his problems."
* Ladner has signed something releasing AU from all further claims, and AU has released Ladner from all known claims, but if anything comes up in the future, they can pursue him (which Ladner cannot do to us).
* No additional payment to Nancy Ladner; settlement is primarily designed with Ladner himself in mind.
* The $950K check should not affect the 2 year budget. Expecting a drop in expenses in the presidential office (which did indeed get a laugh from us.)

Part V. Discussing the Board.
* Still relatively far apart; "spirited" discussion; aware of campus concern; willing to say to Ladner "this far, no further."
* Working on a town hall meeting in early November with a few trustees. Not sure of size or time, etc. Something they are trying to work out though.
* Gary Abramson is trying to catch up on board governance issues (is also on subcommittee?). G. has informed him of student demands for 3 students and 3 faculty.
* G.: "We've got to figure out how we help the board get comfortable with regular interaction with campus." "Connect routinely and effectively with campus."
* Gary A. has to decide by Nov. 11 who the vice-chair will be, may keep G.
* G. is going to propose to Gary A. composing an open letter to AU re: the climate/culture of the board.

This is essentially the Board's side of the story, and doesn't disagree with what students are getting in their inbox right now:

STATEMENT FROM THE
AMERICAN UNIVERSITY BOARD OF TRUSTEES
Thomas Gottschalk, Vice Chair

Dr. Benjamin Ladner, president of American University, today resigned as
president and professor at the university. The Board of Trustees
accepted Dr. Ladner’s resignation and thanked him and Mrs. Ladner for
their years of service and contributions to the success of the
university. Dr. Ladner has agreed to relinquish any claim to tenure or a
faculty appointment.

Dr. Ladner released the university from any and all claims arising under
his contract. The university agreed to pay a one-time settlement payment
of $950,000. This payment is subject to federal and local income tax
deductions. From the gross amount, the university will also deduct
withholding taxes on the additional imputed income of $398,000 being
reported for Dr. Ladner for the years 2002–2005 and $125,000 in
reimbursable personal expenses due the university for the same period,
as determined by the Board of Trustees’ Audit Committee and accepted by
the board.

Acting chair of the Board of Trustees Thomas Gottschalk said, “The board
felt it was in the best interests of the entire university community to
put the controversy surrounding the Audit Committee’s investigation and
Dr. Ladner’s employment behind it. I along with many others have been
saddened that recent events have overshadowed the great achievements of
American University during Dr. Ladner’s presidency, and I hope over time
some balance and perspective will enable people to focus on the
positives of his presidency as this controversy recedes into the past.”

Incoming board chair Gary Abramson said, “American University has grown
stronger and stronger in every respect over the past 10 years due in
large part to an outstanding and dedicated faculty and motivated, bright
students who chose American to prepare them for their future success. We
will now return the board’s full attention to providing the governance
and resources which will help the university retain its position as one
the of country’s leading universities and to grow even stronger as it
continues to develop its enormous potential.”

Over his 11-year tenure, Dr. Ladner previously earned and has had set
aside annual amounts of deferred compensation which he will retain. This
deferred compensation includes approximately $1 million which is the
present cash value of a split dollar insurance policy for which Dr.
Ladner is named beneficiary. It also includes current account balances
in two deferred compensation trusts established for Dr. Ladner’s
benefit, which now total about $1.75 million.

It should be clearly understood that these balances accumulated over the
period of his employment and reflect investment returns on the amounts
contributed. These balances had been held in trust for Dr. Ladner’s
benefit as deferred compensation. No new cash payments or contributions
are being made to these deferred compensation accounts other than one
final payment of the annual premium that was already due in this
academic year on the life insurance policy.

Dr. Ladner has agreed to vacate the president’s house in 90 days, and
the university has agreed to reimburse him for relocation expenses
actually incurred by him up to a maximum of $20,000.

October 24, 2005

I am going to say in this entry until I can get to the next one... I think that these numbers do not necessarily have an objective basis. I have A LOT of questions after getting this information, and I know the deans and the faculty do as well. This is not as cut and dry as they present it.

I shall have more...

Rundown of today

2005-10-24T23:19:00.000-04:00

There is a lot a lot a lot of information gathering in my brain right at the moment, and I'm basically going to have to do this in chunks. I have been at AU since 6:30 this morning, and I left at 11 tonight. There's a lot of conversations, a lot of events, and a lot of things to go through.

Things that I am going to try to get to by tonight:
1. I was invited to the debriefing with Tom Gottschalk (vice chair of the Board) today at 4 PM. I have about 3 pages of notes to organize and type up.
2. My reaction to the package, what's going to happen in the week to come.
3. General events of today.

So... yes. I'll be updating until I collapse basically.

Ladner must accept by...

2005-10-23T10:41:00.000-04:00

So, as the Post says:
American University trustees have agreed to offer ousted president Benjamin Ladner a choice: Accept a departure package of between $3 million and $4 million by the beginning of next week or be fired "for cause" and risk losing some or all of it, sources said.

The interesting bit that I've only been informed of JUST NOW?

Ladner must make his decision by midday Monday, giving the campus no time at all to respond. Thanks Board... once again you are ever so helpful.

As more comes in, I'll keep you posted.

Leo Jaskol's resignation letter

2005-10-23T00:11:00.000-04:00

You know, I really hate to have to keep posting these things. As the Post said, the source is not Mr. Jaskol, but I can't reveal who if you'd like to keep getting this kind of information from me. We do need to thank the people behind the scenes who are willing to pass the information on anonymously, like the whistle-blower. These people will never get the credit they deserve for their unwavering support during these difficult times for AU. They are, however, doing the most they can for our University.

As for Mr. Jaskol, after reading this letter, and having been priviledged enough to speak with him briefly after the Sept. 28th board meeting, I can say with confidence that the AU community has lost a great ally on the Board.

I have one note. Mr. Jaskol quotes a current employee of AU in his resignation letter. I am leaving the quote, but omitting the name -- simply so this person does not have negative repurcussions experienced due to the posting of the letter. It is not my place to make this person's name public, and I hope you all can respect that. Thank you.

October 20, 2005

Mr. Thomas A. Gottschalk
Acting Chairman
Board of Trustees

It is with deep regret that I now tender my resignation from the American University Board of Trustees effective October 21, 2005.

I am compelled to take this action because of the events that have taken place during this past year. There is no need to recount what has transpired, first with Dr. Ladner’s compensation and then with the audit of his expenses, because that has already been well-chronicled by Leslie Bains and Paul Wolff in their resignation letters.

The primary motivation to resign lies with the behavior of the “Ad Hoc” Committee. In my view they have lost sight of the Board’s mission to serve American University. Their agenda appears to be the support and defense of Dr. Ladner and only when confronted by the enormous outpouring of no confidence by the students, Deans, Faculty, and staff did they finally agree that Dr. Ladner could no longer serve as President of American University. Now they want to reconstitute the Board leadership and implement their “programs”. Given what I have observed during these past months, I am not encouraged.

There has been an effort to come to an agreement with Dr. Ladner to resign, involving substantial sums of money. Having been a businessman for more than forty years, I understand the practicality of settling these matters rather than litigating them. However, in this case, my conscience won’t allow me to vote for any payment of funds, no matter how rationalized. As [name omitted], said, “It’s not about the contract, but about conduct”. Further [he/she] said that, “Dr. Ladner exercised poor judgment, has become a public embarrassment, does not have the good will or trust of the AU community, and has evidenced years of disengagement”. [He/She] also made clear their complete rejection of any golden parachute for Ben Ladner. I believe [he/she] spoke for all of the stakeholders of AU, and I cannot improve upon [his/her] words.

The Board is deeply divided and has become far less able to carry out its fiduciary duties. Disagreements are inevitable but a return to civility, cohesiveness, and effectiveness does not appear likely. I have waited until now to resign because, as Chairman of the Audit Committee, I could not leave until the investigation was complete and all remedial actions had been taken. Dr. Ladner has been invoiced for the amounts owed by him to AU for unauthorized expenses plus interest. Various Federal and state tax filings have been revised for imputed income not yet recognized for the past three years and have been submitted to the IRS. I can now affirm to KPMG, AU’s outside auditors, that the financial statements truly reflect the University’s strong financial condition. My work is finished.

I commend my fellow Executive Committee members and four other trustees for their unfailing support. I want to make specific mention of George Collins, immediate past Chairman, Paul Wolff, and Leslie Bains. George brought transparency and good overall governance to the Board. Paul gave freely of his superior intellect and energy. Leslie, as our new Chair, had ambitious plans and, had they been implemented, would have achieved new milestones for American University.

The Trustees who resigned before me and those that are likely to follow should not be criticized for leaving the Board. We no longer comprise the majority and, therefore, cannot overcome the potential bad governance that is likely to ensue. Officially, our voices may no longer be heard, but we stand ready to join with others to help in any way we can.

I have been a Trustee of American University for more than twelve years and have enjoyed my association with many past and present Trustees. The Deans, Cabinet, Faculty, staff, and other employees, as well as the students of American University rank among the finest individuals I have ever been affiliated with and collectively deserve credit for AU’s success. They are entitled to a Board of Trustees who puts all personal allegiances aside, places the interests of the University first and foremost, and exists for no other purpose.

Very truly yours,

Leonard R. Jaskol

In other news, apparently $4 million/# of undergrad students at AU = $618 per student. FUN!

Student Reaction

2005-10-22T12:46:00.000-04:00

So now that the AU students have woken up and are starting to hear about the article from the Post...

One theory is that the BOT is leaking that number so that way they look like good guys when they announce severance will actually only be 2 million or the original package that we thought we were giving him. The problem is, I don't think that's going to happen. From what I've heard, Ladner was not negotiating... he was just asking for insane amounts until they gave it to him.

AU shouldn't be afraid of litigation with Ladner. The Board even voted that the '97 contract wasn't valid. It was a narrow vote, but even with the Ad Hoc committee in control now, it still happened. We should not be giving this man oodles of money.

And this news story is hitting during Family and Alumni weekend over at AU. Wonder if the parents will finally get wind of what's going on.

CONTACT THE BOARD NOW!

2005-10-22T01:45:00.000-04:00

Here's the two comments I have...
1. Make your comments intelligent. If you're angry, make sure they know it, but don't swear or insult them (or if you do, keep it subtle).
2. Aim for persuasion. Not ranting. We want to convince these people that $4 million is too much money.

OK. Now, you all know this one:
aubot@american.edu

But you probably don't know these:
Gary Abramson: gma@towercompanies.com
David Carmen carmend@carmengroup.com
Jack Cassell jackvae@aol.com
Pamela Deese deese.pamela@arentfox.com
Jerome Del Pino ogs@gbhem.org
Fuad El Hibri felhibri@ewrcorp.com
Farsi Hani hani@dircon.co.uk
Thomas Gottschalk t.gottschalk@gm.com
Charles Lydecker clydecker@bbdaytona.com
Robyn Mathias arrmathias@aol.com
Regina Muelhauser reginaliang@aol.com
John Petty johnp@tecsec.com
Robert Pincus rpincus@milestonecap.com
Matthew Pittinsky matthew@blackboard.com
Bishop Schol jschol@bwcumc.org
Jeffrey Sine jeff.sine@ubs.com

Late night news...

2005-10-22T00:06:00.000-04:00

Straight off the presses... or at least it will be tomorrow morning. At the Post online:

AU to Offer As Much as $4 Million to Ladner

American University trustees have agreed to offer ousted president Benjamin Ladner a choice: Accept a departure package of between $3 million and $4 million by the beginning of next week or be fired "for cause" and risk losing some or all of it, sources said.

He's going to take it. You know he is. $3/4 million? Of course! Of course, if he takes it, he's GONE gone. No tenure. No nothing. See you later.

Is it worth it guys? Another $4 million? I doubt a law suit would cost *that* much.

ETA: It's made the Reuters alert system. Press Digest says: Embattled American University President Benjamin Ladner will be given the choice of accepting as much as $4 million to leave his job or risk being fired.

Severance package

2005-10-21T18:12:00.000-04:00

Word on the street is saying:

Ladner's severance is going to be 3-4 million.
Leo Jaskol, head of the audit committee, resigned in protest.

This info is coming from reliable sources. Wait for the Post tomorrow. There is going to be a major major article.

Hey AU? Going to sit back and take this one?

New Chair

2005-10-20T20:00:00.000-04:00

And I didn't even break the embargo like a good kid. Gary Abramson is our new chair of the Board of Trustees.

Big article from the Eagle about pretty much everything today.

I'll post more about the rally later; however, my pizza was just delivered to my roommate and I, and I am going to eat first and formulate my thoughts over a few hours tonight.

Basically, I think the message is strong, but the interest from students is wavering because of the short term fix with Ladner. It may come to a smaller group to keep things moving forward, but I still think a lot of people on campus do care and are willing to speak out.

In the meantime, have a good night all. I'm going to go enjoy my steak pizza. Woot!

Gang of 13

2005-10-19T10:21:00.000-04:00

You wanted the Gang of 13, here they are, in alphabetical order too! So if you don't like these people (who don't particularly like you), please come to the rally. Call them out. Make them accountable. Put pressure on them. Most of them just don't know better: they're new trustees who don't know AU. There are a few though who are as dedicated to their insider games as I am to keeping things open. Let them know: WE ARE WATCHING YOU.

Gary Abramson – his name has been mentioned as the next Chair.

David Carmen – the ring leader

Jack Cassell - the biggest surprise to me.

Pamela Deese – voted against accepting the Audit Committee report

Jerome Del Pino – the Methodist representative from their Higher Ed dept.

Fuad El Hibri – voted against the Audit report

Hani Farsi – horrible attendance rates at board meetings

Charles Lydecker – brand new Trustee and has never attended a Board meeting, listens to everyone else

Robyn Mathias – a former school principal who also voted against the Audit report

Regina Muelhauser – brand new Trustee, is a fan of secret Board action

John Petty – Ben’s best friend and former head of the Audit Committee, voted against the Audit Committee report (remember? Ben threw this guy a birthday party at $250 a head! gee, no wonder why he's biased)

Robert Pincus – a former Washington DC banker

Jeffrey Sine – UBS securities in NYC; worked to cut a deal with Ben for repaying the University for only $21,000 versus $125,000.

Rally, rally, rally!

2005-10-19T00:57:00.000-04:00

I'm just going to keep mentioning the rally, so it's always at the top. Yes, shameless self-promotion. RALLY. QUAD. THURSDAY. 5 PM. BE THERE.

The quick point of this post:
Because some people on various message board apparently don't trust my word that another trustee has resigned, here is the stone cold evidence from the Washington Post (completely buried in the Metro section today):

Another Trustee Resigns from AU Board

American University trustee Michael D. Capellas, chairman and chief executive of MCI, has resigned, citing a need to devote more time to his company, according to Thomas A. Gottschalk, the acting chairman of the Board of Trustees.

The board, which is continuing talks on the terms of departure for ousted president Benjamin Ladner, now has 21 members. The departure of Capellas follows that of former chairwoman Leslie E. Bains on Oct. 9 and Paul M. Wolff two days later.

The board voted last week to dismiss Ladner and also asked him to reimburse the university $125,000 and report an additional $398,000 in taxable income for three years that auditors investigated.

STUDENT RALLY, 10/20, 5 PM, QUAD

2005-10-18T18:26:00.000-04:00

I'm keeping the same subject line, just to emphasize how much we need this, more than ever. Each event is going to build on the last.

Michael Capellas was one of the trustees who is pro-student and was against Ben Ladner's return, as well as his severance package.

There are 13 trustees in the ad hoc group, the "Gang of 13," whatever you want to call them. They are not in this for AU, they are in this for themselves. They are willing to pay off Ladner, instead of taking a stand and saying that AU is an instution that will stand by its own principles of service and intergrity. These people are not our friends.

On the other side, there were, at first, at least 9 trustees. Leslie Bains was one, Paul Wolff was another. With Michael Capellas and his resignation, we are now down to 6 trustees who are willing to put principles before pay offs.

We have to let the Board know that the students will not stand for this. We changed their minds once. Let's do it again.

QUAD. THURSDAY. 10/20. 5 PM.
MAKE YOUR VOICE HEARD.

STUDENT RALLY, 10/20, 5 PM, QUAD

2005-10-18T17:42:00.000-04:00

Well, the title says it all. Student Rally, this Thursday (10/20) @ 5 PM on the Quad in front of Mary Graydon Center.

Please please come. Let the board know that:
*We are against an excessive severance package, "the golden parachute."
*We believe Ladner should be fired for cause.
*We, the students, faculty, staff, and alumni of AU still care about this issue.
*We are still watching the Board and will hold them accountable for their decisions.
*We demand transparency of the Board, as well as student and faculty representation.

The students (myself included) who have formed the ad hoc response to this situation were officially recognized as a student group today, which means very little, except that we are now able to get events and signs approved under our own name.

In news for the day, Trustee Michael Capellas of MCI resigned today, stating that he needed to essentially "get back to work." I'm not entirely sure where he stood on the board or what positions he endorsed, but we are working on seeing if there is a resignation letter and his track record on the Board.

Some links for you to read from within the university:
*AU Weekly has an interview with Acting President Kerwin up at their website. It's on the main page now, and when the new issue comes out I will update the link.
*Staff Council Letters Sent to AU Board of Trustees: Robin Beads posted this back on October 2, but I only have been digging around there today.

Also, if you see people on out the quad with a petition that says:
We, the undersigned members of the American University community, hereby affirm our commitment to the highest moral and ethical standards for this University by asking the Board of Trustees to terminate Benjamin Ladner for cause—that is, without a "golden parachute" severance package that allows Dr. Ladner to derive further personal economic gains from his misdeeds.
PLEASE SIGN IT! And if anyone wants, I can upload a .doc file with the petition so you can make all your friends sign, and then you can get it back to us. This goes for alumni as well.

That's all for now, I'll update if anything happens tonight though.

Thursday

2005-10-17T19:36:00.000-04:00

Stay tuned for details on Thursday... the plans are being finalized tonight. The Board will be meeting all day Thursday: let's remind them that the students still care, and that we will not be satisfied with a golden parachute for Ben Ladner.

I'll post tonight as soon as I have confirmed the times.

Your Morning Reading

2005-10-17T07:50:00.000-04:00

Well, it's been quiet over the weekend... gearing up for this week, I suppose.

If you go to AU, or are an alum, check this link out:
Make Your Voice Heard
Courtesy of the AU Methodists.

The latest news to read:

Washington Post: Deconstructing a Man of Contrasts
Bit of a biography of Ladner. But then it gets into his personal life at AU, and some rather frightening quotes from his staff:
"I worked for the university," he said, with a $40,000 salary. "But I felt like their personal little slave boy."

The Chronicle of Higher Education: Trustees at American U. Fire President but Remain Divided Over Severance
Ms. Bains, in her resignation letter, blamed a "very small, yet mean-spirited" faction of trustees for her resignation, while Mr. Wolff wrote that a group of 13 trustees "is motivated by a desire for the days of the past when secrecy prevailed and the president's expenses were never audited." Mr. Wolff also said trustees had made "baseless" accusations about conflicts of interest involving him and another trustee. Lawyers representing the group of 13 trustees did not respond to a request for comment last week.

Yes, as I heard from someone from the top, the phrase the ad-hoc committee has even used for their desire to return to secrecy, not only out of the public eye, but out of the AU community as well:

Big Brother knows best.

Frightening, hm?

Wolff finishes online chat

2005-10-14T13:37:00.000-04:00

Well, the online chat is over, and the transcript is up in its entirety at the Washington Post website.

A lot of questions as to why he resigned, which isn't all that surprising. Pretty much the same points he stated in his letter. I do also find it concerning that the -- ok, we need a name for the members of the Board who aren't part of the ad hoc committee, for now, I'm going with pro-student -- that the pro-student members of the board are now down two members. I don't necessarily think that all the members of the ad hoc committee are anti-student, but I do think they are not necessarily invested in what's best for AU. The good thing about his resignation, as well as Leslie's, is that it puts the Board in a very public eye, outside of American University. These people are under a lot of pressure, and a lot of scrutiny. They're probably turning down phone call after phone call from the press. They're probably getting a lot of emails from the students, from faculty, from staff. The decision will not be made lightly.

Re: the 1997 contract. Two law firms, and highly respected ones at that, have made the call that Ben Ladner is an employee at will. Just one more reason why Ben should NOT be floating away on his golden parachute (and who am I kidding? At this point, we should probably be calling it platinum.)

Re: the "witchhunt." Thank you, Mr. Wolff, for telling it like it is. A lot of Board members put aside friendships to do the right thing. Ben Ladner may be a perfectly nice man, but his actions do not add up. I have never met Ben Ladner, so I cannot attest to this personally, but I can say for myself that the first student rally was never meant as a witchhunt, the following student actions were never meant as witchhunts, and any further student actions will have nothing to do with witchhunts. Dr. Ladner, I was actually born in Salem, MA. I know what one of those looks like.

I think this was my favorite question:

AU senior, Washington, D.C.: Would you ever consider a post as president of AU?

Paul Wolff: If you're offering, you're overly kind but I have to believe that there are literally hundreds of better qualifed people out there, including many now at American University.

It is sort ofa silly question, but Mr. Wolff is right when we have qualified people here at AU that could quite reasonably take over as president. Dr. Kerwin especially, but I can think of a few other people who would be excellent choices.

Of course, we're getting ahead of ourselves here in even thinking about a new president while the issue of severance and new board members is still up in the air.

All in all, many more excellent points from Mr. Wolff. He's definitely not one to mince his words, but that's exactly what we need at the moment.

Wolff online chat @ 12:30

2005-10-14T12:27:00.000-04:00

Wolff will be online once again at the Post website, and in about 2 minutes. Sorry to post the link so late, got distracted by a few phone calls.

Go and ask your questions!

Unlike Ladner, Wolff will probably even answer the tough ones!

Some other things

2005-10-13T23:31:00.000-04:00

Well, the big read of the day is obviously Wolff's resignation letter. I just heard that the Eagle has a received a copy, so I assumed it was safe to post.

NBC covered Wolff's resignation, and interestingly enough, their informal online poll has some rather overwhelming results:

Should American University's board of trustees award Benjamin Ladner a severance package?

Yes	Votes 130	8%
No	1565	92%

92% is a pretty large number. Pretty hard to argue with too.

Paul Wolff's Resignation Letter

2005-10-13T23:18:00.000-04:00

From a confidential source. It's been bouncing around a bit, but I think it's finally starting to get leaked out.

Here it is in its entirety. Let me know what you think. Personally? I love it.

My Fellow Trustees:

I resign from the American University Board of Trustees effective immediately. I can not and will not continue to serve on a Board that counts among its members individuals who show so little regard for the most basic canons of board governance.

The atmosphere in the boardroom remains polluted with mean spiritedness. The call for better governance by the self-appointed Ad Hoc Committee has now been exposed as the sham I always worried that it was. My conscience forbids me being a party to any agreement with Ben Ladner that either allows him to be affiliated with AU or to receive severance other than that irrefutably mandated by law. I cannot be involved, no matter how well-intentioned, in any additional payment. I stand four-square with the deans, the faculty, and the students. They are right. We cannot compensate ethical blindness. To do so, undermines AU’s core values.

A board can only operate effectively if its members are collegial and treat their fellow trustees with respect and deference, no matter how strongly they may disagree. They discuss; they do not disparage. It is on this principle that all other principles of governance build. Yet the Ad Hoc Committee, and most particularly several of its members, have never missed an opportunity to attack our outside advisors, question their competency, belittle the motives of the Chair, challenge the integrity of fellow trustees, and make baseless claims of conflict of interest against Margery Kraus and me, all without any support, only with innuendo and meanness.

I had hoped that once we all recognized the need for Ben to leave, the sniping would stop. When Jerome DelPino, early in the meeting, asked that the “trashing” of fellow trustees stop, I felt that a new day had arrived for the Board. My hopes were immediately dashed. Literally within minutes, the attacks began anew. First there was a gratuitous challenge to Tom Gottschalk’s right as Vice-Chair to run the meeting, but more importantly, an attack on his objectivity and loyalty to the Board. This was the beginning, not the end.

Leslie Bains has served this University for many years – longer than all members of the Ad Hoc Committee. She has been generous in both her time and her money, unlike several members of the Ad Hoc Committee. She has always put the interest of AU first, at no time more than when she offered her resignation so that her Chairmanship would not be an issue during the debate over Ben Ladner. Notwithstanding that act of ethical generosity, people on the Board sought to exact the last pound of flesh and tried mightily to make sure that her exit from the Board was not defined by her grace, but by their nastiness. Although she made it clear to the Vice-Chair that she would resign effective Tuesday, this did not satisfy her detractors who, ignoring the by-laws, sought her removal at yesterday’s meeting and made clear their displeasure when the Vice-Chair ruled them out of order.

The attacks on the integrity of Arnold & Porter have been continuous, strident and without merit. They have been raised to such levels of vituperation as to be almost humorous except that they clearly evidence an abandonment of decency. It is hard to believe, but true. One of our Trustees has spread the ridiculous rumor that Arnold & Porter is the subject of the United States Attorney’s investigation regarding the University. As I said yesterday and as bears repeating today, I have worked with Arnold & Porter and its lawyers for over three decades. Before the Board hired Jim Joseph, I knew him by reputation. I have now seen him at work. His reputation, as significant as it is, understates his excellence, his devotion and his decency.

When Manatt, Phelps was hired to give a second opinion (an unnecessary expense only incurred because of the relentless attacks on Arnold & Porter by the Ad Hoc Committee), the assignment was given to Steve Ryan, a well-known and well-respected attorney in this city. Notwithstanding the impeccable credentials of both him and his firm, the work of Manatt, Phelps has been attacked as biased, improper and to use its detractors’ words, “out to get Ben.”

It is not acceptable governance to ignore the message, but attack the messenger. This practice continued unabated yesterday. My letter to the Trustees outlining my opposition to Ben’s retention is still unanswered. Not a word; not a call; not an e-mail. Just an attack on my and my wife’s integrity. The same is true for Arnold & Porter’s opinion letter on my and Margery Kraus’s alleged conflict. Unanswered. No opposition. No apology. Indeed there has never been any opposition on the merits to the actions of the Executive Committee or the Audit Committee. Tom Gottschalk’s fitness to chair the meeting yesterday was challenged because, as an Executive Committee Member, he had voted to suspend Ben. Yet his speech and letter explaining the decision elicted not one word of response from his critics. The attacks on Protiviti, Arnold & Porter and Manatt, Phelps not only continued yesterday, but became even more shrill. The wait continues for a response to the law firms’ various memoranda and opinion letters. As the decibels of attack got higher, so did the level of disregard for their research and their opinions, backed not only by Jim Joseph and Steve Ryan, but with the full support of their respective firms.

That these attacks continued unabated yesterday would be reason enough to leave the Board. I defend Leslie Bains, Jim Joseph and Steve Ryan not because they are either friends or fellow lawyers, but because they are good people who did nothing but what was best for AU.

Under the Chairmanships of George Collins and Leslie Bains with Len Jaskol, as chair of the Audit Committee, a new transparency came to the Board replacing the secret agreements, concealed activities, and dereliction of duty we experienced under the leadership of Bill Jacobs as chairman and John Petty as Audit Committee Chairman. The Ad Hoc Committee has made numerous calls for changes in governance. I found this quizzical but was willing to press on. I questioned whether their requests had substance because so many of its members had been leaders in the attempts to derail the audit, no one more so than John Petty with his constant drumbeat about “standards audits.” His position reached unthought-of levels of silliness when the Board was presented with a statement by Ben’s personal chef, complaining that the investigation of the Ladners did not appear to be a “standard audit.” I concede, as Ben and Nancy have proved, that the chef knows his lobster, foie gras and fine wines. But auditing procedures. Come on.

My hopefulness that the Ad Hoc Committee truly wanted better governance became skepticism when they showed no interest in Leslie Bains’ 14-point program. Their response to her call for openness and more participation by faculty and students was a demand for her resignation. Yesterday, my skepticism turned to disbelief. It is now clear that the Ad Hoc Committee is motivated by nothing but a desire for the days of the past when secrecy prevailed and the President’s expenses were never audited. They continue to embrace Bill Jacobs’ heretofore hidden 1997 contract that was neither authorized nor ratified by the Board. They simply brush off the fact that two law firms have opined that the ’97 contract is invalid.

When it worked to their advantage, the Ad Hoc Committee demanded strict obedience to the by-laws. Yet yesterday, when the by-laws were an impediment to their actions, they flouted them. Only the strength of the Vice-Chair in ruling their actions out of order prevented us from having improper action approved. Nothing highlights the Ad Hoc Committee’s disregard for good governance more than its attempt to override the by-laws and install a new chairman. What made their actions that much more reprehensible was the fact that the new Chairman had been selected by them without consultation or even warning to any other Board member. Their confidence that they could ignore the by-laws and force their demands upon the Board was made abundantly clear in a document that they inadvertently allowed non-members to see. In this paper they refer (as if it were a fait accompli) to their candidate as the new Chairman.

Juxtapose these actions with their earlier complaints about the over-reaching of the Executive Committee. We have heard repeatedly, and again yesterday, how the properly empowered Executive Committee erred in suspending Ben without discussion with them. The Executive Committee had the power to act. It explained its reasoning. The Ad Hoc Committee has no power to act. It never explained its decision or sought anyone’s advice. They simply tried to force a new chairman upon us.

The Trustees are fiduciaries to the University, not Ben Ladner. Yet many on the Ad Hoc Committee still do not seem to grasp this most basic tenet. How else can one explain their behavior during the compensation review in early 2005. The Compensation Committee under George Collins, for the first time in my years on the Board, sought a thorough analysis of Ben’s compensation. Not happy with the results, members of the Ad Hoc Committee, and only members of the Ad Hoc Committee, voted to reject the recommendations of our outside advisors, shrug off any need for a comfort letter, thumb their noses at the IRS and invite government sanctions. Etched in my mind is the smug statement of one Ad Hoc Committee member that we should give Ben whatever he wants.

I was prepared to attend yesterday’s meeting and overlook their loyalty to Ben, rather than the University, as misguided, but well intentioned. I was prepared to start with a clean slate and disregard the fact that they were ready to bring back the chef, the social secretary and to give Nancy Ladner a salary greater than many professors. This was clearly false exuberance. When a committee was chosen to negotiate with Ben, the Ad Hoc Committee members again revealed where their loyalties rest and nominated only their own, not interested in any other views. Wiser heads prevailed and a committee of balanced views was chosen. A committee of multiple voices and not just one was clearly anathema to two of the committee’s leaders who voted against the selections.

I have great respect for the three members of the committee designated to negotiate severance with Ben. I have every belief that they will do everything possible to get the absolute best deal for AU. My disagreement is not with those people, but with their mission. I am opposed under any circumstances to any negotiation with Ben. I do not back off out of the fear that he may sue the University. As Dean Grossman pointed out, expedience should not trump ethics. We should not alter our position out of fear of litigation. As the Dean further stated, it is likely that, severance package or no severance package, there will be litigation. Litigation from Ben if he is not satisfied. Litigation from concerned faculty members and other stakeholders if the package is too rich.

The deans, the faculty and the students have spoken out unequivocally. They have asked not only that Ben be discharged but that he be given no more of the University’s money. They have asked repeatedly that there be no golden parachute, no severance package and nothing that is not legally required. I agree.

I had hoped in the past that Ben would do what is best for the University and resign quietly and apologetically. He has done just the opposite. He has been steadfast in his statements that he is right and that he should be retained. He has dismissed the votes of no confidence as “uninformed.” He has labeled his transgressions “mistakes.” He has been steadfast in giving a deaf ear to calls for his resignation. He has shown no contrition. As time has made clear, nobody but a very few diehard supporters on the Ad Hoc Committee agrees with Ben. The deans, the faculty, the students, noted university presidents, and the media have condemned his unseemly behavior and his waste of precious University assets. His response has been to hunker down and to give and to write self-serving interviews and editorials belittling the investigation as a vicious attack on a “man of change.” Quite frankly, he simply doesn’t get it. He still sees 13-course meals, posh hotels, chauffeured limousines, all paid for by tuition dollars, as appropriate. This is why, as I stated yesterday, he should be discharged. We have long gone past the time to allow him the luxury of resignation.

Ben Ladner is an at-will employee. There is no contract between him and the University. As I have stated, and two major law firms have confirmed, the 1997 contract is invalid. Even if people believe it is valid, the Board should follow the expert advice of our counsel and force Ben to prove, in a court of law, the contract’s validity. To ignore the legal opinions and to give Ben a single benefit under the ’97 contract is quite simply a breach of fiduciary duty.

The question of the validity of the ‘97 contract is really only an academic exercise. The issue of its effect on any severance to Ben is a moot issue. Under its provisions, Ben can be discharged for dishonesty. If so discharged, he gets nothing in benefits, no severance. I will not enumerate the laundry list of untruthfulness uncovered by the Audit Committee’s investigation. It is only sufficient to cite two – one major; one minor – to make clear that even under the ’97 contract nothing is owed to Ben Ladner. Minor is the fact that, in the face of uncontested documentation to the contrary, Ben told the media not once but repeatedly that he never sought a raise in compensation. Major is the uncontradicted fact that after this investigation began, Ben altered his records without disclosure so as to show that certain trips were for business, not pleasure.

My call for no severance is not vindictive, but necessary to show how serious we take his misdeeds, his damage to AU. We must remember the cost already of Ben’s excessive behavior. The over $500,000 in imputed income and reimbursables if diverted from fine wines, fancy parties and luxury travel would have covered the salaries for one year of at least four faculty members. The earnings alone from this waste of University assets would have provided in perpetuity a full tuition scholarship for one student.

Members of the Ad Hoc Committee have complained repeatedly about the cost of the investigation. No question about it. It has been huge. It will total nearly $1 million. But we must remember that this $1 million was spent because of Ben’s behavior. It was necessary to do so. The whistleblower letter could not be ignored. The Audit Committee had to be thorough. It could not brush off the allegations or sweep them under the rug. As Len Jaskol made clear on several occasions, the cost, moreover, was exacerbated by Ben’s unwillingness to cooperate and stonewalling. The cost was further increased by the delaying tactics of the Ad Hoc Committee.

The need to sever all relationships with Ben Ladner and to have him leave with no severance package is not only a question of money, but a question regarding the future of AU. As Acting Provost Ivy Broder so eloquently stated, “an ethical cloud” hangs over the school. There is an unfathomable depth of resentment on the campus toward Ben Ladner. As our faculty pointed out, Ben’s behavior has subjected the University, the deans, the faculty and the students to embarrassment. We must remove the cloud. We must speak out clearly and unequivocally. We must tell the University and all of our constituencies that a new day is dawning and that behavior such as Ben’s will not be countenanced. Any payment beyond that required by law will send a clear message that bad behavior has its rewards. People will continue to look cynically upon our University. To compensate ethical lapses only compounds our problems. As I leave the Board, I urge you to do what is right, not what is expedient. If we are to be a school that shows zero tolerance for misbehavior, we must also mete out zero reward for such lapses.

I leave the Board with sadness. I have great affection for AU. I always had respect and admiration for the deans and faculty. No more so than yesterday. I never fully understood the depth of their love for this University. I always knew we had an outstanding student body. I now know that they are not only outstanding but committed to this University and its core values.

It has been a pleasure to work over the years with so many outstanding fellow trustees. I have admired the work of George Collins and Leslie Bains for bringing a new openness and transparency to the Board. I have and will always have a soft spot in my heart for George Collins who sacrificed his friendship with Ben Ladner for fiduciary duty. The list goes on. Len Jaskol for his tireless work as Chairman of Audit Committee. Tom Gottschalk, Ed Carr and Gary Cohn for their dedicated service to the Board and the Executive Committee. I wish all of you, both friend and foe, good luck. I leave with a fervent hope that you will do the right thing for AU, the deans, the faculty, the students, the alumni and all those, like myself, who wish nothing but the best for the University.

Sincerely,

Paul Martin Wolff

University Presidents and Executive Compensation

2005-10-13T13:12:00.000-04:00

Digging into Google, I found some articles back from 2003 by Raymond Cotton, the lawyer who was quoted as being a specialist on university president salaries. The two articles are both from the Chronicle of Higher Education, which, along with Inside Higher Ed, I feel like I should be buying a membership or something from them because I visit their sites so often now.

The articles:

First is a live Colloquy transcript featuring Cotton as the expert (much like Wolff and Ladner both answered live questions at the Post Website) from 11/13/2003:
Evaluating Presidential Pay

Second is an article written by Cotton himself, from 11/14/2003:
Negotiating Your Contract: Lessons from the Front

They provide pretty fascinating reads. We are not the only school to have gone through this, and the other article that I linked to with other big spenders proves this. What I find so interesting is the questions these people are asking two years ago are the same ones I'm asking now:

Comment from Michelle, Case Western:
My greatest concern is the justification for these salaries. Essentially, presidents are fundraisers; even certified fundraisers have legal and ethical limits on their labor and activity. What are the restraints on these executives? What are their limitations? By what standard are they held accountable? I just don't get it... In the meantime, support staff and service workers are not being fairly compensated.

W're finding out the answers to those questions at AU didn't really exist. There were no realy restraints on Ben Ladner. As a trustee pointed out to me after the meeting on Sept 28, Ladner was allowed discretion, and he abused it. Should he have been allowed discretion in the first place? Probably not. He even threw a large birthday party for Trustee John Petty at $250/head. How is this man supposed to supervise the spending habits of a crony?

Question from Herman Prins Salomon, University at Albany:
Mr. Cotton, you claim that all the presidents you know are of high moral caliber. Why should people of high moral caliber recognize only one form of gratificantion, namely money, money and more money? What example are they setting American youth?

Raymond D. Cotton:
May I refer you to the AGB publication entitled "Presidential Compensation in Higher Education: Policies and Best Practices". Their viewpoint, which I support, states as follows: "In the end, say economists, it is about money, not just about 'principle.' What we earn -- and the process by which we are paid -- matters. It matters to the long-term viability of organizations that they are able to attract and retain the most capable and talented leaders in their profession. And it matters to those who hold top leadership positions that they feel appreciated and that their exemplary work is rewarded financially and in other ways."

I'm going to look for this publication, and when I find it, I'll link it here. Should prove another interesting read.

As for his actual article, it's almost unintentionally hilarious to read a few days after Ladner was let go:

A host of other matters ought to be considered during negotiation, including housing, transportation, disability insurance, life insurance, tuition waivers for the president's children, and whether the president's spouse will receive any compensation. Just how important those issues are depends on the circumstances of the president and his or her family. But they should at least be put on the table and discussed thoroughly by both sides. Issues that are not dealt with in this way can become irritants in the relationship between the president and the board. Occasionally, such irritants cause a presidency to end prematurely.

Sigh.

Other interesting links from the Chronicle, all outdated since they are linked from the 2003 articles, but still a good background read (which is nice for me, because I am trying to educate myself about presidential salaries, job responsibilities, boards, etc):

Executives' Compensation at Private Instituations. You can pull up figures up until the 2002-3 academic year.

High Pay, Hard Questions. An article from their special edition on executive compensation.

It's Lucrative at the Top. Deals with public universities, but still concerned with executive compensation.

Proving Presidential Worth. Do highly paid presidents of private colleges deserve their compensation? Those presidents and their governing boards are under more pressure than ever to prove it.

Well guys, there's some reading material to hold you for the afternoon. Is it a bad sign that I don't find this dry, academic stuff?

The Eagle's Out Today

2005-10-13T08:34:00.000-04:00

Bunch of links to all relevant stories today in the Eagle. You may need to join the website so that way you can read all the articles in their entirety.

Ladner fired after nine-hour meeting, two trustees resign.

University survives scandal.

Conduct of Ladner, trustees draws mixed reactions.

Timeline of events in Ladner probe.

Staff editorial: Good riddance, Ladner.

Letters to the Editor.

DC Examiner Editorial

2005-10-13T07:56:00.000-04:00

Really, super-duper quickly before I have my 8:30 class and I need to leave, like now. DC Examiner has an editorial today: No Way to Pick A College President.

The comparison to Berendzen is unfair, but expected. But these are two completely different situations: one was a private problem made public, this one with Ladner is a public problem attempted to be kept private. And that is a big difference.

Best part though?

"These are not average people," one blogger said in Ladner's defense. True. Any average person caught plundering a university that's been overly generous to them while 82 percent of its freshmen qualify for financial aid wouldn have the decency to not show their face on campus again.

More on Wolff

2005-10-12T22:15:00.000-04:00

The complete article at the Post is up: Second Trustee Critical of Ladner Departs American University Board.

Some quotes, and then my thoughts on them.

Sources familiar with why Bains and Wolff resigned said both felt they no longer could be effective because of a lack of support.

I feel like this is very true: they have been two very public faces on the board, especially with students, but Wolff especially not being afraid to present a public face. They were easily made targets by other members of the board, and thus, by putting themselves out on a limb, also made themselves perhaps a bit more susceptible to attacks by the "mean-spirited" members of the board.

Three trustees, perceived as representing a range of opinions on the board, were tapped to negotiate a departure package with Ladner. They are, the sources said, investment banker Gary D. Cohn, businessman Jack C. Cassell and Bishop John R. Schol of the Baltimore-Washington Conference of the United Methodist Church.

Now we know who to target, at least. I think I know which is the pro-Ladner, which is the neutral, and which is the one who argued for Ladner to be fired.

Trustee David M. Carmen introduced a resolution at the Monday meeting to name Gary M. Abramson chairman, according to sources, but Thomas A. Gottschalk, who was chairing the meeting, ruled the resolution out of order... Carmen and Abramson are members of a group of 13 trustees who joined together in recent weeks, calling themselves the Ad Hoc Committee, hiring their own attorney and criticizing Bains and the other board leaders who voted to suspend Ladner in August.

Now we also know to fight against Abramson being elected chair. The LAST thing AU needs is a member of the Ad Hoc Committee as chair. If that happened, the school would be in a lot of trouble. These members don't care about AU, they care about Board Politics. They aren't necessarily for Ladner, but they're anti-Executive Committee (and Leslie Bains) and trying to focus on something that is not the issue at hand.

We have about a week to really get the word out about the severance issue. But now we also know who, specifically, to express our opinions to.

2 more news articles

2005-10-12T19:44:00.000-04:00

From the American Association of Collegiate Registrars and Admissions Officers (or AACRAO for short): American University President Dismissed Amid Allegations of Impropriety.

In his statement, Chairman Gottschalk also stated that the deep divide in the board resulting from the controversy seemed to be receding.

And that statement, with Wolff's resignation today, seems to be completely false.

From Inside Higher Ed (a really great site): Expense Account Hall of Shame. Moving beyond AU, what this will teach other universities.

“If you think about the president being the embodiment of the university, then any kind of abuse of university resources is considered a major offense,” said Raymond D. Cotton, a Washington lawyer who specializes in presidential compensation in higher education.

I'd really rather like to have a talk with Raymond D. Cotton. I think that would be rather fascinating.

More later tonight.

Trustee Paul Wolff Resigns

2005-10-12T18:15:00.000-04:00

More news today: Trustee Paul Wolff has resigned from the Board. The Washington Post has broken the story online already: Wolff Resigns from the AU Board of Trustees.

From what I've heard already, it seems to be for two main reasons:
First, that the Board is very much an unfriendly place to be right at the moment.
Second, that he does not support giving Ladner any semblance of a severance package.

This means a few things:
1. We're going to have to work really hard on making sure the board knows we do not want a severance package. Of course, any sign from the Dept of Justice or the IRS would help a lot. If the meeting re: severance is on Oct 20, then these two agencies would have to move soon.
2. Just because we have lost two of the more vocal members of the pro-student/anti-Ladner camp doesn't mean that the vote isn't present... a lot is going to rest of how they fill the three missing seats (Ladner's, Leslie's, and Paul's). I think there is still a lot going for these symbolic gesutres to the board, but it still will make things a bit harder for us.

I was asked today if I was disappointed in Leslie Bains and in Paul Wolff for removing themselves from the situation and resigning. I'm not in any way. They have done what they can, to the best of their abilities, as far as I'm concerned. I do regret that they felt forced to remove themselves from the situation, because that shows a much larger problem at hand, and that is the structure of the AU Board of Trustees and the attitudes of some of its members.

We need to target the Trustees who are more loyal to Ladner than AU: and the two names that I know for a fact are David Carmen and Pamela Dees. For them, this is entirely about politics, instead of a university. They do not care about American University, in the slightest. While both Leslie Bains and Paul Wolff have left them nameless, I'm not about to.

David Carmen, Pamela Dees, and any other trustee member who is against students and faculty on the board, who wants to give Ladner his golden parachute, who doesn's care about American University: you are not welcome here. RESIGN from the AU Board of Trustees.

Quickly...

2005-10-12T12:34:00.000-04:00

I missed the other Post article last night, and it's about Kerwin: AU's Acting President Connects

Great story about Kerwin. He's in a bit of a tough spot while he's only "acting" president -- no big decisions can be made, yet AU really needs to present a new face and show that we're moving forward.

To the alum who commented: I'm going to see if I can talk with some administrators and do a bit more research on this, but yes, I do agree with you on pretty much everything. There has been a nation-wide increase in GPAs, etc. I'm curious to see what some other people think at AU though, before I write out a big response.

Personal Thoughts

2005-10-12T00:54:00.000-04:00

This blog is going to be posted to, and it's going to happen a lot in the next few weeks. There's just so much going on, so much student discussion happening, and so many different groups interacting that might not have otherwise done so... the information is flying fast and furious. But as much as this blog is intended to be a spot for information, I'm not going to hesitate to share my thoughts as well. I just have some thoughts that have been kicking around my head since last night that I wanted to get out.

Tonight I went to a dinner party with a good group of friends: one who has been there since that first Monday, and has been involved since day one of the student rallies. Her younger sister, who has helped us out multiple times, dragged her friends out to our events, and cheered as loudly as all the rest. My roommate, who has painted signs, been woken up by my phone ringing at 7 am because a reporter needs information, and done the dishes countless nights after I dash off to a meeting. The other two, a lovely couple, can be spotted in many news reports as they march across the quad on their way to the board room yesterday. We were gathered around a large chicken, with vegetables and salad (you know, the works). This has been one of the best and most complete meals I have sat down to in the last 3 weeks. Before we started to eat, however, my friend raised her glass and proposed a toast: "Of course, we have our rabble rousers here, and I feel like a proud mom... but really, this toast is to Kiki Ladner. She's slumming it tonight; perhaps she'll even have to cook her own meal." We all laughed and clinked glasses. I think out there tonight, there are students, faculty, alumni, and staff all celebrating in a similar way, and while I think Jordan Landry -- the kid quoted in the Post the other day -- is right in feeling sorry for the Ladners, that in reality, after the "imperial" lifestyle they have lived during their time as the "First Couple" of American University, we're allowed a little humor after last night.

This is merely an overly elaborate introduction into something that I've been thinking about since oh, 11 o'clock yesterday. At the Butler Board Room, where the 2-3 dozen of us were camped out on the landing of what was technically Mary Graydon 4A... basically a staircase away from one set of doors leading into the Board Room, two girls came up with signs. These signs read, and if I recall them correctly: "I <3 Ladner" and "Ladner Built This School." Now, putting aside what I think were questionable intentions, I found it deeply ironic that after the confrontation that seemed somewhat inevitable, and the students protesting asked why these two girls had come, their reasons could not hold up. After one girl left to give press interviews, we asked the other why she had come. She replied that she believed that Ladner had made the school what it was today, and we were wrong to not give him proper credit (I will get to this in a minute). Amazingly, when we asked what she thought about Ladner's fate, she said that yes, he should be fired.

Personally, and I can only speak for myself here, I have never debated that AU has improved enormously since Ladner's arrival. There's actually a fact sheet amongst all the rest of my documents with the change in AU's stats from 1994-2004. My two points about this are: 1) Ladner is not solely responsible for this improvement: a lot has had to do with faculty, administration, etc; and 2) the price that we have been paying for this improvement may or may not be worth it.

I have had this same argument, and only slightly more intelligently, with Cyrus Katzen. During the student rally on Sept. 28th, he approached me and a fellow student organizer before the rally started. He was actually the one that gave me this fact sheet that I just mentioned. The problem with this sort of argument is that it doesn't even remotely approach what we were arguing about: Ladner's expenses, his moral intergrity, and his potential to regain an effective leadership of American University.

I appreciate that two students were willing to show up in a potentially hostile environment where they were drastically outnumbered, but I also have reservations about the manner in which they tried to present their argument. Calling us "dirty hippies" (which provoked a rather indignant response from my roommate: "Hey! I'm a Republican!") was not exactly the most enlightened tack to try to explain their point of view. Of course, it seems that no one I've encountered so far who has tried this argument has been able to reach above petty insults in order to defend themselves. I'm not out here to smother your voice... I'm out here trying to get mine heard, which incidentally seems to share an opinion with a fair number of others.

The other thing I wanted to post about, but I now will hold off on, is the level of student activism on campus vs. outside causes. I had a long talk about it while waiting for the Board to make up their damn minds, and it produced some interesting comments.

That's all for tonight. But one last link: while I've been type-type-typing away, I found another WJLA story (sadly, no video link): Acting President Works to Move Past AU Investigation.

The Latest News

2005-10-11T23:45:00.000-04:00

The Latest Wash Post Article: AU Trustees to Negotiate Ladner Severance

Some interesting quotes:

According to sources who asked not to be identified because of the confidentiality of board proceedings, there were no dissensions during the vote to terminate Ladner, who was suspended in August, but there were abstentions. Exactly how many was unclear yesterday.

After lengthy debate, the sources said, the board appointed three of its members -- one who had been a staunch supporter of Ladner, one who sought his ouster and one perceived to be neutral -- to work together to negotiate a package that Ladner would be willing to accept but that would not be seen as a "golden parachute," or an excessive amount. Faculty, students and deans have said such a package would be inappropriate.

Ladner and his attorneys have said in documents submitted to the investigators who conducted the audit that he believes he is entitled to all the provisions in a 1997 employment contract he signed. That contract, which the investigators concluded would not hold up in court because they said it was never ratified by the full board, provides generous severance terms, including a position as a tenured faculty member with benefits and a salary "that is always 20 percent above the highest AU faculty salary."

That's some interesting information... Of course, I'd love to know who the three are. I can hazard some guesses, but really, they're probably going to be wildly inaccurate. I hope that David Carmen is not in that subcommitte, but at the same time, I'm nervous about him being in any subcommitte.

The article also names a likely candidate for the new chair: Gary Abramson. I know nothing about him.

The next meeting is Oct 20. That means we have very little time to pull things together re: severance. I can understand the need to try to avoid a lawsuit, but the tenure/20% package make me incredibly angry. Also, if there's any chance of a criminal investigation, it would not look good for us to throw money at this man, especially after we ask him to pay back more than $100,000 and report another $400K to the IRS.

I do want to mention my confidence in Kerwin: I've never heard anything bad about the man, and all my experiences with him, directly or indirectly, have been positive. He's much more well known to the students, and our ability to recognize him is at least tenfold (if not a hundredfold) of our ability to recognize Ladner. I would hope that his name is kept in the running in the search committee, although I understand and stress the need to look outside, but I think Kerwin would be a qualified candidate for university president.

Washington Post Stories

2005-10-11T14:07:00.000-04:00

Every Washington Post story I can find that deals with Ladner, the Board, and recent events:

10/11/2005: Trustees Oust Ladner as President
10/9/2005: Dissecting Ladner's Legacy at the Helm of AU
10/9/2005: AU Scandal Atypical in Post-Enron Era, College Presidents Say
10/9/2005: Column: As Ladner Tallied Riches, Faculty Pinched Pennies
10/8/2005: Attorneys Challenge AU Trustees' Leadership
10/8/2005: My Side of the AU Debate (Ladner's essay)
10/8/2005: Mr. Ladner's "Mistakes" (accompanying editorial)
10/7/2005: Lawyers' Report Says Ladner Should Repay AU $115,000
10/7/2005: Transcript: Benjamin Ladner Online Chat
10/3/2005: Transcript: Trustee Paul Wolff Online Chat
10/2/2005: Ladner's Severance Could Top $1 Dollars
10/1/2005: Ladner Aide Contradicts Explanations of Expenses
9/30/2005: Majority of Trustees Say Ladner Must Leave
9/30/2005: Letters to the Editor: Spending and Listening Habits at AU
9/29/2005: Ladner Memo in 2004 Sought $5 Million Boost
9/28/2005: Once Friendly AU Board Splintered Into Factions
9/28/2005: American University Board of Trustees, 2005-2006
9/27/2005: AU Faculty Members Vote No Confidence in Ladner
9/20/2005: Federal Official Scrutinize Ladner
9/16/2005: Layoff Amid Probe of AU Head's Spending
8/25/2005: Ladner Suspended During AU Audit
8/3/2005: AU President's Expenses Examined
7/30/2005: AU Calls in Lawyers, Auditors to Investigate Finances
3/24/1997: An American Revolution
8/8/1995: AU President Shuffles Management
4/18/1994: American U. Picks New President

Leslie Bain's Resignation Letter

2005-10-11T13:32:00.000-04:00

Stories about the resignation:

The Eagle: Board Chair Resigns, calls for Ladner's removal

Washington Post: AU Trustees Chairwoman Quits and Rebukes Ladner before Vote

The resignation letter:

Statement By Leslie Bains

The American University Board of Trustees has been investigating improper personal and travel expense spending by President Benjamin Ladner since March. That investigation has been painstaking in its attention to detail and fairness and painful because Dr. Ladner has fought every aspect of the investigation from failing to produce records when requested to claiming that the University is contractually required to pay for every limousine ride to his gym to workout and every item of food and drink that he consumes, with no tax consequences to him. In addition, a vocal minority of my colleagues on the Board have consistently parroted the Ladner line, and introduced irrelevant issues aimed at distracting a majority of the Board from what I and many others believe are serious failings by Dr. Ladner: an indefensible diversion of funds from the main mission of our University - educating the students - and into an imperial life style to which he had become accustomed.

Clearly, the deans, faculty, a majority of students and others have no question that Dr. Ladner at a minimum has lost his moral authority to lead and violated the trust put in him by the Trustees, parents, alumnae and students. While the Board's tortured deliberations have taken an inappropriately long time, the American University court of public opinion issued its sound and well-reasoned verdict immediately - they cannot conceive of Dr. Ladner returning to run American University.

There is no question in my mind that a majority of the Trustees now agree with me and the University community that Dr. Ladner must go. This Board must finally focus its full attention on the indisputable facts uncovered in the investigation, and the devastating testimony and other overwhelming evidence documenting Dr. Ladner's spending. The votes are finally there to dismiss Dr. Ladner. My vote is no longer needed. My fellow Trustees will do the right thing Monday. But I will not be with them. I am resigning as Chair and as a member of the Board effective today.

Why am I resigning? Sadly, a very small, yet mean-spirited, group of Trustees on this Board have disregarded their fiduciary obligations to be stewards of the University. They tried to vote to increase the President's salary to a level far above comparable universities, which could well have invited sanctions from the Internal Revenue Service. They have attacked anyone who dared to present facts to the Board that they did not like. They tried to de-rail the Audit Committee's investigation. They threatened litigation to enjoin a Board meeting called to resolve the Audit Committee's investigation. They challenged the authority of the Executive Committee to suspend the President. And finally, they tried to call a special meeting of the Board to reinstate the President with a generous salary package for his wife, bringing back the French chef and social secretary and providing other perks that so many in the University and among the general public have found to be totally unacceptable. The pro-Ladner forces this weekend called for my resignation. It is yet another attempt to distract the board. That now is not an issue.

The major issue here is not whether Dr. Ladner violated a contract that is or is not valid. What he did was just plain wrong. He violated the trust put in him by the Board and the University community. He spent University money on things such as his son's engagement party and, to this moment, still says he was justified in doing so, even as he offers to repay a small portion of what is really owed on a series of issues. He had the University pay to chauffeur his wife to her beauty salon appointments. He used University funds to pay for elegant meals that were solely for the pleasure of him and his wife. He enjoyed lavish and unnecessary layovers in Paris, London and Rome at University expense, and more.

Yet, some trustees are still intent on providing Dr. Ladner with a very attractive severance package. The court of public opinion will not stand for rewarding Dr. Ladner's bad behavior, and neither will I. I hope that my fellow trustees will stand firm and reject any attempt to make an unnecessary and unjustified severance payment to Dr. Ladner.

For those on the Board who have shown blind allegiance to Dr. Ladner, rather than acting in the best interest of the University, the time is now for you to leave the Board. I call on you to resign. At the same time, I have reached out individually to each member of the Executive Committee and urged them to remain on the Board. Each member of the Executive Committee has stood firm and fought for this University, and I hope they will continue that fight. I am confident that their high moral standards and integrity will carry the day.

There is no question, too, that over the years the Board should have exercised greater oversight over the president. I recently recommended a 14-point reform program aimed at improving and strengthening our governance, and it is a program I hope the Board will consider.

I am a proud American University graduate. I have had the pleasure of knowing and speaking with deans, faculty members, students and others over the years, and especially over the last few weeks They have demanded and deserve the most ethical and competent leadership from the University President and the Board. I am confident that the Board will do the right thing in insisting on nothing less from its next president and itself.

The 14 point plan is an important step in restructuring the governance of the Board of Trustees, as well as the upper level administration of American University. While Leslie Bains was only recommending one student and one faculty member, whereas the students would obviously like one for each branch: undergraduates, graduates, and law students. With the new subcommittee of the board, there will be a lot of study going into what will work best, and I'm confident an effective comprimise between the Board and the AU community will be reached.

Leslie Bain's 14 point Plan:

September 30, 2005

TO: Campus Community

FROM: Leslie Bains, Chair, Board of Trustees

SUBJECT: Open Letter to the AU Community

_____________________________________________

Since assuming the chair of the Board of Trustees in May, I
have spent much time with all the trustees discussing changes
in how the trustees operate and a reform agenda for the campus.

I propose this to the community as a proud 1965 American
University graduate who wants to see our great university
continue to grow into one of the leading higher institutions of
learning in the country and be a campus that is leading a
reform movement not just here, but setting new standards across
the country.

Having participated in an extraordinary, indeed historic, set
of meetings on Wednesday (September 28) with leaders from the
American University community, I am more convinced than ever
that the university is capable of playing this leadership role.

I am proposing a 14-point reform agenda, and I encourage
members of the AU community to let me know their thoughts as
the board considers these changes. My plan is as follows:

We will encourage and institutionalize more board
interaction with the community. I will host a series of town
meetings on campus during the academic year, inviting other
trustees and the university president to join those
meetings. The aim is to encourage a free flow of ideas and
debate over the direction AU should take.

I will propose to the Board of Trustees that we should add
one student to the board.

I will propose to the Board of Trustees that we should add
one faculty member to the board.

I will propose to the board that we increase from three to
four board meetings a year.

I will set up a committee to rapidly update the board bylaws
and make them more consistent with twenty-first-century
practices.

I will propose that the board adopt a bylaw that revokes
board membership from any trustee who misses more than two
meetings in a year without an excused absence. Except for
the faculty and student members, each trustee should be a
contributor to the university, relative to their own means.

I will propose reinforcing the university's existing
spending controls, annual audits of senior officers of the
university, with clear guidelines for spending and travel
costs, especially in the Office of the President. The chair
of the audit committee has already put in place new
financial controls. We need to do even more.

We will continue to formally evaluate the president's salary
and benefits in line with the appropriate comparisons and
institute a more rigorous annual performance review.

There will continue to be zero tolerance at all levels of
the university for financial or ethical lapses.

I propose that the Board of Trustees consciously focus on
the need for greater diversity on the board to reflect the
diversity on campus and our values.

I have already established breakfasts and a luncheon with
the deans, appropriate members of the faculty, and our
student leaders for the November board meeting. This will
become a regular practice.

The president will not be a member of the Board of Trustees
but will come to our meetings as appropriate.

We will reinforce the whistle-blower policy at the
university.

We will assure that code of conduct and conflict of interest
statements are signed by all trustees and appropriate
members of management annually.

At the November board meeting, I will encourage our trustees to
adopt these changes as soon as possible.

This is a truly outstanding university. We attract top faculty,
students who become leaders of our country and in the various
professions, and staff that proudly does its work every day. We
have a loyal group of alumni and donors without whom this
university could not exist.

The time has come—and is long overdue—for more and better
communication on this campus.

I welcome any and all suggestions from anyone associated with
this university.

I look forward to working with the Board of Trustees and the
American University community to advance the institution's
important mission.

First thing, some news

2005-10-11T13:09:00.000-04:00

Here's the first collection of press and news media after the decision last night from the Board of Trustees to fire Ladner. Good mix here: scholarly journals, newspapers, tv packages, blog reactions, etc.

Washington Post: Trustees Oust AU's Ladner as President

The Eagle (AU's newspaper): Ladner Fired, Severance Pay in Question

DC Examiner: AU Votes to Remove President After Long Closed-Door Meeting

New York Times: American U. Dismisses Its President over Spending

The Associated Press story that seems to be everywhere, including China, Italy, India, Minnesota, Arizona, California, etc etc... across the United States. It also made the front page of Yahoo! last night, 5th item down in the news section: American Univ. Trustees Oust President

DCist, a local DC blog, covers the press conference and the student reaction: Breaking News: Ladner Fired, Severance in Question

DCist also covered the morning student rally: Students Rally Against Ladner

Inside Higher Ed: Ousted at American U.

The Chronicle of Higher Education: Ladner "Is Terminated as President" of American U., With Severance Undecided and Records Under Federal Review

WJLA ABC 7 News: (contains a video link) American University's President Will Not Return

NBC 4: Rally Under Way to Support University President's Ouster

NBC 4: (contains a video link) AU Board Considers President's Fate

NBC 4: (contains a video link) Trustees: Ladner Won't Return as AU President

That's most of the major DC news sources. If I find any more, I'll be sure to post them. I'm also going to start posting links for earlier stories, Leslie Bain's letter and 14 point plan, and a bunch of other information, just so it can all be in one place.